Question

Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's, knowing 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.

Answer 1

Answer:

hi!

i believe that the answer is ,

E

Explanation:

this participates in supply and demand a topic in social studies

hope this helps

pls put brainliest

Answer 2

Answer:

Decrease demand for Wendy's products.

Explanation:

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.

Hope that helps.