Suppose the Demand for Widgets Is Given by Q_D =

question 163

Multiple Choice

Suppose the demand for widgets is given by Q_D = 100 - 5p - p_d + 2I,where I is average consumer income,p is the price of lemons,and p_d is the price of doodads.According to this equation,doodads are a(n) ________ for widgets.

• A)substitute
• B)complement
• C)input
• D)None of the above

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Definitions:

Variable Manufacturing Costs

Costs that fluctuate directly with the level of production output, such as the costs of raw materials and direct labor.

Selling Price

The amount a company charges for its product or service, which can impact demand, revenue, and profitability.

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services.

Variable Cost

Costs that vary directly with the level of production or volume of operations.