Answer the following questions correctly. Which of the following is one of the j

Question

Answer the following questions correctly.

Which of the following is one of the justifications given for the law of supply? The income effect. Diminishing marginal utility. Potential higher profit. All of the above. Only A and B are justifications given for the law of supply. Which of the following might have caused the price of pizza to go up? The price of cheese, an input, decreasing. The price of Chinese food (a substitute for pizza) going up. A new technological breakthrough making it easier to produce pizzas. A report by the surgeon general stating that pizzas cause cancer The price of beer, a complement to pizzas, goes up.

Explanation / Answer

Q 2. C

Potential Higher Profit..Because as price increase, firms are willing to supply more and so the supply surve is upward sloping

Q 3 B

As the price of substitute goes up, People now shift towards pizza and hence demand increases. Demand Increase lead to an increase in Price of Pizza

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