If an Increase in the Price of One Good Causes

question 31

Multiple Choice

If an increase in the price of one good causes the demand curve for another good to shift to the left,then the two goods are

• A) Substitutes
• B) Complements
• C) Normal
• D) Unrelated

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Definitions:

FIFO Method

An inventory valuation method that assumes that the first items produced or purchased are the first used or sold.

Unit Costs Decreasing

A situation indicating that the expense incurred to produce a single unit of output is declining, often due to efficiencies or increased production scale.

Lowest Gross Profit

The smallest amount of profit generated from selling goods or services, calculated by subtracting the cost of goods sold from sales revenue.

Raw Materials

Basic substances in their natural, modified, or unprocessed states used in the production or manufacturing of goods.