Demand ________ If the Price of a ________ Product or Service

question 47

Multiple Choice

Demand ________ if the price of a ________ product or service ________.

• A) decreases; substitute; rises
• B) increases; substitute; falls
• C) increases; substitute; rises
• D) decreases; complement; falls
• E) increases; complement; rises

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Definitions:

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and price control by individual firms.

Profit-Maximizing Level

The optimal point at which the difference between total revenue and total cost is the greatest, indicating the highest possible profit for a firm.

Short Run

a period in economics during which at least one input is fixed and cannot be changed, limiting a firm's ability to adjust production.

Fixed Costs

Expenses that do not change in proportion to the activities of a business within a certain range of operation, such as rent, salaries, and insurance.