Question

George owns a custom pottery business where he makes all types of mugs and drinkware. Which of the following products would dramatically affect his profit margins if the price were to decrease for that product?
a. glass coffee mugs
b. coffee beans
c. silverware
d. clay

Answer 1

Answer:

a. glass coffee mugs

Explanation:

As we know that the glass coffee mugs and the pottery mugs are the subsitutes goods. In the case when the price of glass coffee mugs would decline so it would more consume due to which the demand of the pottery mugs would reduced

Therefore as per the given situation, the product that impact the profit margin is option a

hence, the correct option is a.