If Prices of Both Horizontal and Vertical Goods Decrease by 50

question 9

Multiple Choice

If prices of both horizontal and vertical goods decrease by 50%,

• A)budget constraint will be unchanged.
• B)slope of the budget constraint will increase.
• C)slope of the budget constraint will decrease.
• D)budget constraint will shift outward in a parallel fashion.

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Definitions:

Antitrust Liability

Legal responsibility for engaging in practices that restrain trade, reduce competition, or create monopolies, violating antitrust laws.

Relevant Geographic Markets

The area in which a company competes for customers for its products or services, important in assessing competition and regulatory compliance.

Merger

The combination of two or more companies into a single entity, often to increase competitive advantage or market share.

Sherman Act

In the United States, a crucial antitrust act that disallows monopoly practices and actively supports competitive market activities.