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:

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business.

Corporation

A legal entity distinct from its owners that can own assets, incur liabilities, and sell stocks to raise capital.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, dramatically transforming societies from agrarian to industrial.