A Rise in the Price of a Substitute in Production

question 235

Multiple Choice

A rise in the price of a substitute in production for a good leads to

• A) an increase in the supply of that good.
• B) a decrease in the supply of that good.
• C) no change in the supply of that good; instead there is a change in the quantity supplied.
• D) a decrease in the quantity of that good supplied.
• E) no change in either the supply or the quantity supplied of the good.

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Definitions:

Retail Method

An accounting procedure for estimating the value of a store's merchandise by using the cost to retail price ratio.

Manufacturing Businesses

Companies that produce new products from raw materials through various processes, machinery, and operations.

Period End Assets

The total value of all assets owned by a company at the end of a financial reporting period.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated for reporting and taxation purposes.