The price of cake falls and as a result the demand for ice cream increases. What can we conclude? Cake and ice cream are inferior goods. The marginal value of ice cream is greater than the marginal value of cake. Cake and ice cream are complements. Cake and ice cream are substitutes.
The price of cake falls and as a result the demand for ice cream increases. What can we conclude? Cake and ice cream are inferior goods. The marginal value of ice cream is greater than the marginal value of cake. Cake and ice cream are complements. Cake and ice cream are substitutes.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter6: Simple Pricing
Section: Chapter Questions
Problem 5MC
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