If a 20 Percent Increase in the Price of One

question 98

Multiple Choice

If a 20 percent increase in the price of one good leads to a 10 percent increase in the quantity demanded of another good at a specific price, the goods are:

• A) substitutes.
• B) normal.
• C) inferior.
• D) complements.

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Definitions:

Cash Bidding Price

The price offered in cash for an asset at an auction or in a competitive bidding situation.

Common Stock

Equity ownership in a company, giving holders voting rights and a share in the company's profits through dividends.

Ontario Ltd.

A term used to designate a limited company in the province of Ontario, Canada, often seen in business names.

Joint Venture

Involves the joining together of parts of companies to accomplish specific, limited objectives. Joint ventures are controlled by the combined management of the two (or more) parent companies.