If the Price for a Product Increases, the Demand for the Complementary

question 46

Multiple Choice

If the price for a product increases, the demand for the complementary product will

• A)decrease.
• B)increase.
• C)stay the same.
• D)become more elastic.
• E)become more inelastic.

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Definitions:

Economic Profit

The difference between a firm's total revenue and total costs, including both explicit and implicit costs, measuring the firm's performance beyond the basic business costs.

Investment

The action of designating capital with the intention of securing an income or a financial return.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Economic Profit

The distinction between total sales and the aggregate of both explicit and implicit expenses for a firm.