Two Products Are Perfect Substitutes If

question 1

Multiple Choice

Two products are perfect substitutes if:

• A) a consumer is willing to swap one for another at a fixed rate.
• B) they are valuable only when used together in fixed proportions.
• C) their indifference curves are L-shaped.
• D) an increase in the price of one good causes a decrease in the demand for the other good.

---

Definitions:

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold, before accounting for other expenses.

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Cost Of Goods Sold

Refers to the total expense directly related to the production of goods or services a company sells.