Holding all else constant,an increase in the price of hot dogs would cause the
A) marginal revenue (MR)curve in the market for hot dog buns to increase.
B) marginal revenue (MR)curve in the market for hot dogs to decrease.
C) average total cost (ATC)curve in the market for hot dog buns to increase.
D) profits in the market for hot dog buns to increase.
E) marginal revenue (MR)curve in the market for hot dog buns to decrease.

Question

Quizplus · Accepted Answer

An increase in the price of hot dogs would decrease the quantity demanded of hot dogs, which would in turn decrease the demand for hot dog buns. This would cause the marginal revenue (MR) curve in the market for hot dog buns to decrease, as producers of hot dog buns would sell fewer buns at a lower price, resulting in a lower marginal revenue.

Holding All Else Constant,an Increase in the Price of Hot