Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's, knowi
ng that a decrease in the prices at these other fast-food restaurants will: A. increase the income effect for Wendy's products.
B. increase demand for Wendy's products.
C. decrease the income effect for Wendy's products.
D. increase the complementary effect for Wendy's products.
E. decrease demand for Wendy's products.
This is because Wendy's is aware of the cross elasticity of demand and the effect it can have on Wendy's given a change in price of its competitors. Since the competitors are all substitute goods which means that a decrease in price of any substitute that is the competitor product will shift people from buying Wendy's to these competitors, thus reducing Wendy's product demand and its revenue.
Cross elasticity of demand for substitutes is 1> . Hence the qty demanded for Wendy's will fall more than the increased revenue by charging higher price than its competitors.
The total time period for which interest will be accrued and will be credited to the interest income account would be for the period November 1,2018 - December 31,2018 i.e 2 months.
Because she is a chronically ill individual, Julia may exclude the full amount she receives as it is less than the amount of actual expenses and the daily limitation of $300 established by law.
