If,because of a Price Change,both the Income and Substitution Effects

question 141

Multiple Choice

If,because of a price change,both the income and substitution effects are strong for a normal good,this segment of the demand curve must be:

• A)unit-elastic.
• B)vertical.
• C)relatively price-elastic.
• D)horizontal.

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Definitions:

Local Optimization

Focusing on improving or optimizing a specific part of a system or process, without necessarily benefiting the system as a whole.

Pull Data

Accurate sales data that initiate transactions to “pull” product through the supply chain.

Vendor-managed Inventory

A supply chain initiative where the supplier is responsible for managing and replenishing inventory based on agreed levels at the customer's location.

Vertical Integration

The strategy of extending a company's operations within its value chain, either backwards into producing raw materials or forward into distribution and sales.