An Increase in Which of the Following Determinants of Demand

question 175

Multiple Choice

An increase in which of the following determinants of demand will have an ambiguous (uncertain) effect on price

• A)taste.
• B)price of a complement.
• C)income.
• D)price of a substitute.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, faced by a business.

Profit-Maximizing

A strategy or objective focused on making the highest possible profit, where marginal revenue equals marginal cost.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, giving each some degree of market power while still allowing for free entry and exit in the market.

Fixed Costs

Expenses that remain constant regardless of business activity levels, including lease payments and insurance premiums.