During the Recession of 2007-2009,despite Falling Income Levels,the Fast-Food Chain

question 51

Multiple Choice

During the recession of 2007-2009,despite falling income levels,the fast-food chain Subway experienced increased sales.The increase in demand for Subway sandwiches despite the decline in income indicates that Subway sandwiches are considered

• A) normal goods.
• B) inferior goods.
• C) complementary goods.
• D) substitute goods.

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Definitions:

Total Revenues

The total amount of money generated by a firm from its sales activities before any costs or expenses are subtracted.

Total Costs

An alternate formulation for the sum of all expenses incurred in the production of goods or services, reflecting both fixed and variable components.

Profit

The financial gain obtained when the revenue from business activities exceeds the costs and expenses associated with operating the business.

Economic Profit

The total revenue from operations minus both the explicit and implicit costs; it's a measure of profitability factoring opportunity costs.