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 their products.
B) increase demand for their products.
C) decrease the income effect for their products.
D) increase the complementary effect for their products.
E) decrease demand for their products.

Question

Quizplus · Accepted Answer

A decrease in prices at competitors like McDonald's, Burger King, and Arby's would likely lead to a decrease in demand for Wendy's products, as consumers may choose the cheaper alternatives.

Managers of Wendy's Fast Food Restaurants Keep Track of Prices