If the Price of Ice Cream Increases Substantially (Ceteris Paribus)

question 162

Multiple Choice

If the price of ice cream increases substantially (ceteris paribus) , the equilibrium quantity of hot fudge sauce, a complement, is likely to:

• A)​increase, and the equilibrium price of hot fudge is likely to decrease.
• B)​increase, and the equilibrium price of hot fudge is likely to increase.
• C)​decrease, and the equilibrium price of hot fudge is likely to decrease.
• D)​decrease, and the equilibrium price of hot fudge is likely to increase.

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Definitions:

Shares

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Merger Control Statutes

Laws and regulations that govern the merging of companies to prevent anti-competitive practices and ensure market fairness.

Competition

The rivalry among businesses or individuals within a marketplace, aiming for greater sales, market share, and customer loyalty.

Aggressor

An individual, group, or nation that initiates hostile action or unprovoked attack against others.