If Products C and D Are Close Substitutes,an Increase in the Price

question 35

Multiple Choice

If products C and D are close substitutes,an increase in the price of C will:

• A) tend to cause the price of D to fall.
• B) shift the demand curve of C to the left and the demand curve of D to the right.
• C) shift the demand curve of D to the right.
• D) shift the demand curves of both products to the right.

---

Definitions:

Revenues

The total amount of money received by a company from its business activities, such as sales of products or services, before any deductions.

Revenue Recognition Principle

An accounting principle that determines the specific conditions under which revenue is recognized and recorded.

Unearned Revenues

Money received by a company for a service or product that has yet to be delivered or provided.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.