Bundle: Managerial Economics, Loose-leaf Version, 5th + MindTap Economics, 1 term (6 months) Printed Access Card
5th Edition
ISBN: 9781337607995
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 12, Problem 5MC
To determine
Acquiring complementary good.
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Two goods are substitutes if a decrease in the price of one good. This will lead to:
Select one:
a. reduces the quantity demanded of the other good
b. increases the demand for the other good.
c. increases the quantity demanded of the other good
d. reduces the demand for the other good
Which one of the following statements is incorrect?A. Market demand consists of the combined demand of all the participants in the market.B. The quantity demanded of a good, say a loaf of bread, depends heavily on the availability of the good.C. The quantity demanded of a good depends on the income of consumers.D. The quantity demanded of a good also depends on the prices of related goods (complements and substitutes).E. Demand decisions have to be analysed independently of the supply situation.
For a particular good, 10% increase in price causes a 5% decrease in quantity demanded. Which of the following statements
is most likely applicable to this good?
a. The good is a luxury
b. The market for the good is broadly defined
c. there are many close substitutes for this good
d. The relevant time horizon is long
Chapter 12 Solutions
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- computers and software are complements, then A) other things being equal, a fall in the price of computers will increase the demand for software and, the price of software will fall. B) other things being equal, a rise in the price of computers will decrease the demand for software and, the price of software will fall. C) other things being equal, a fall in the price of computers will decrease the demand for software and, the price of software will fall. D) other things being equal, a rise in the price of software will increase the demand for computers and, the price of computers will rise. E) other things being equal, a fall in the price of software will decrease the demand for computers and, the price of computers will fall.arrow_forwardMarc-Antoine and Annabelle have demand curves for books which are descending lines. Annabelle's demand curve has the same slope as Marc-Antoine's. Annabelle's demand curve is to the right of Marc-Antoine's. An increase in the price of books will cause: (a) a shift to the right of the Annabelle and Marc-Antoine demand curves. (b) a left shift of the Annabelle and Marc-Antoine demand curves. (c) a greater reduction in excess consumer consumption for Annabelle than for Marc-Antoine. (d) a smaller reduction in excess consumer demand for Annabelle than for Marc-antoinearrow_forwardTwo goods are complements if a decrease in the price of one good. This will lead to: Select one: a. reduces the quantity demanded of the other good b. increases the demand for the other good C. reduces the demand for the other good d. increases the quantity demanded of the other good.arrow_forward
- If two goods are substitutes, a decline in the price of one will cause an increase in the demand for the other. A.True B.Falsearrow_forwardA reduction in the price of Y from OMR 12 to OMR 8 causes a growth in the quantity of C demanded from 900 to 1,100 units. Y and C are a. complements. b. substitutes. c. normal goods. d. inferior goods Clear my choicearrow_forwardFor a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? A. the good is a luxury B. the market for the good is broadly defined C. the relevant time horizon is short D. there are no good substitutes for this goodarrow_forward
- Equilibrium is achieved when quantity demanded intersect with quantity supplied. Assume aproduct “Mobile Phone” for which supply and demand shifts. You are required to prepare graphs of each situation given below?d. Decrease in the price of a complement for Mobile Phone.e. Increase in the cost of production of Mobile Phone.f. Decrease in the cost of production of Mobile Phone.arrow_forwardIf the demand curve for Good A shifts leftward when the price of Good B decreases, these two goods are _________. Select one: a. complements b. inferior c. normal d. substitutesarrow_forwardf a decrease in price of good X decreases the demand for good Y, which of the following statements are true: Good X and Good Y are substitutes Good X is inferior Good X and Good Y are complements Good Y is inferiorarrow_forward
- For a particular good, a 10 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? a. The relevant time horizon is short. b. The good is a luxury. c. The market for the good is narrowly defined. d. There are many close substitutes for this good. Selected Answer: C. Carrow_forwardMotorcycles and bicycles are substitutes under demand. The following questionsrelate to the bicycle market. 1. Explain how a decrease in the price of motorcycles will affect the demandfor bicycles. 2. Draw a graph that supports the statement in Q.1 above.arrow_forwardSuppose Pepsi and coke are substitutes. A fall in the price of Pepsi will causearrow_forward
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