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Question 5 The management team at Mill Mart, a regional retail chain specializing in discount household goods, has been monitoring the market for some of
Question 5 The management team at Mill Mart, a regional retail chain specializing in discount household goods, has been monitoring the market for some of their key product lines. After conducting research on their cleaning products (the output good is cleaning products), a noticeable decrease in demand (shifting leftward) has been taking place at the industry-level. At the same time, no significant changes in production of these goods, as measured by industry-supply, have been observable. The CEO of Mill Mart is demanding (no pun intended) that the team determine which event is most likely to explain this shift in demand. Student hint(s): In Chapter 8 of Freob's 5" edition, there is a discussion of the factors that shift D and S curves. There is also a discussion complements and substitutes in consumption in Chapter 4 of Froeb. a. the price of refuse products, commonly understood to be complementary in consumption, have risen b. the industry-wide customer base for these normal goods have experienced a decrease in wealth c. the industry-wide customer base for these normal goods have experienced an increase in wealth d. the industry-wide customer base for these inferior goods have experienced a decrease in wealth e. the price of cleaning products falls f. both a and b are correct g. both a and c are correct
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