Which of the Following Explains Why the Quantity of a Good

question 75

Multiple Choice

Which of the following explains why the quantity of a good demanded decreases when its price increases?

• A)Consumer preferences change when the price of a good changes.
• B)The nominal income of consumers falls when the price of a good increases.
• C)Substitutes become relatively cheaper when the price of a good increases.
• D)Complements become relatively cheaper when the price of a good increases.
• E)None of the above provides a reasonable explanation.

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Definitions:

Straight-Line Depreciation

A system for spreading out the cost of a tangible asset in equal yearly amounts across its functional life.

Average Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the average annual profit divided by the initial investment cost.

Annual Income

The total earnings or revenue generated by an individual or business in one fiscal year before any deductions.

Capital Projects

Large, long-term investments undertaken to create, expand, or replace a company's physical assets.