Coke and Pepsi are substitutes if
A) the demand for Coke increases when the price of Pepsi falls.
B) the demand for Coke increases when the price of Pepsi rises.
C) the supply of Coke increases when the price of Pepsi falls.
D) the demand for Coke and Pepsi rise and fall together.
B
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The figure above shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year
With the quota in place, the amount of cotton produced in Georgestan is ________ because the marginal social cost of a pound of cotton is ________ the marginal social benefit of a pound of cotton. A) inefficient; less than B) inefficient; greater than C) efficient; less than D) efficient; equal to
Diseconomies of scale occur when
A) long-run average costs fall as a firm expands its plant size. B) long-run labor costs rise as a firm increases its output. C) short-run average costs rise as a firm expands its plant size. D) long-run average costs rise as a firm increases its output.
On any given day we know a salesman can earn $0 with a 30% probability, $100 with a 20% probability or $300 with 40% probability. His expected earnings equal
A) $0. B) $140. C) $300. D) It cannot be determined from the available information.
Suppose that U.S. mining companies purchase German-made ore trucks at a reduced price. By itself, what effect will this purchase have on the GDP deflator and on the consumer price index?
a. The consumer price index and the GDP deflator will both fall. b. The consumer price index and the GDP deflator will both be unaffected. c. The consumer price index will fall, and the GDP deflator will be unaffected. d. The consumer price index will be unaffected, and the GDP deflator will fall.