Explain how the prices of related goods also affect demand
Please provide the best answer for the statement.
Substitute goods are those that can be used in place of each other. The price of the substitute and demand for the other good are directly related. If the price of Coke rises, demand for Pepsi should increase. Complementary goods are those that are used together like tennis balls and rackets. When goods are complements, there is an inverse relationship between the price of one and the demand for the other. Some goods are not related to each other and are independent goods. In these cases, a change in price of one will not affect the demand for the other.
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Use the following graph for a perfectly competitive firm to answer the next question.
The firm is
A. generating a loss and should shut down in the short run. B. generating a loss, but should continue to produce in the short run. C. earning a normal profit. D. earning an economic profit.
The supply of land being fixed, the earnings from land are called transfer earnings
a. True b. False Indicate whether the statement is true or false
In which market models are firm's demand curves different from their marginal revenue curves? a. monopoly, oligopoly, and perfect competition
b. monopoly, oligopoly, and monopolistic competition. c. monopoly and oligopoly only. d. monopoly only.
NAFTA is an example of a multilateral approach to achieving free trade
a. True b. False Indicate whether the statement is true or false