If the price of orchids falls, the substitution effect due to the price change will cause
A) an increase in the demand for orchids.
B) an increase in the demand for roses, a substitute for orchids.
C) an increase in the quantity of orchids demanded.
D) an increase in the quantity of orchids supplied.
Answer: C
You might also like to view...
All monopolies exist because of
a. firms' desire to maximize profits. b. failure of antitrust laws. c. barriers to entry. d. natural selection.
When practicing price discrimination, a firm can increase its revenue by:
a. charging a higher price to the customers with a more inelastic demand. b. charging a higher price to the customers with a perfectly elastic demand. c. supplying more in a market with a more inelastic demand. d. supplying less in a market with lower elasticity of demand. e. charging a lower price in a market dominated by wealthy consumers.
The granting of small, unsecured loans to small businesses and entrepreneurs is known as
A. Growth finance. B. Long-term finance. C. Microfinance. D. Extreme finance.
Supply is very inelastic when
A. The quantity supplied changes only when demand changes. B. The quantity supplied changes little when the price increases. C. The quantity supplied does not change at all when price increases. D. The quantity supplied changes a lot when price increases.