Answer:
(b). <u>Increase</u> ;<u> Decrease</u>
Explanation:
When the price of a substitute good rises, then it becomes more profitable for suppliers to shift to the other good. Therefore the supply of given good decreases, and the supply curve shifts leftward.
For example, if you're a textile manufacturer who produces cotton and silk clothes if the price of silk rises you'll reduce cotton production to divert resources towards silk. Therefore the demand for cotton clothes reduces.
Due to the leftward shift of the supply curve, the equilibrium price increases and equilibrium quantity decreases.
So we can conclude that an increase in the price of a substitute good will cause the equilibrium price of its substitute to <u>increase</u> and the equilibrium quantity to <u>decrease.</u>
Hence, the option (b) is the correct option.
Answer:
Darren bought a differentiated product.
Explanation:
The differentiated product enjoys a distinction from similar products/brands in the market. This distinction may be real or psychological. Real distinction reflects from the ingredients, quality, utility, or service which the product gives. Psychological distinction is a feature of subtle sales appeals.
Other types of product include Customized, Augmented, and Potential Products. Customized Products are built to customers' specifications. Augmented Products are products with added manufacturers' improvements. Potential Products are tomorrow's products limited by economic and technological resources.
Answer:
73 bottles
Explanation:
Let x = total number of orders
C(x) indicates number of orders and the cost of storage
Thus,
6$ dollar to place a reorder
So,
C(x)= 1(882/x)+6x = 882/x+6x
C'(x)=-882/x^2+6=0
6=882/x^2.
Thus,
x^2=882/6
Which indicates 882/12=73 bottles of wine per order
Thus C (12)=1*73+6*12=$145 per year
The best possible number of bottles per order = 73 bottles