The method of GDP calculation that looks at the profits earned by business owners and the money paid for factors of production is the <u>Income approach</u>.
<h3>How is the income method of GDP used?</h3>
With the income method, the total amount that was paid for to access the factors of production is looked at.
This shows how much spending happened in the economy. The profits of entrepreneurs is also looked at as it is income earned, and not money spent on production.
Find out more on the income method of GDP at brainly.com/question/994415
#SPJ1
Answer:
The correct answer is:
Equilibrium price will decrease; the effect on quantity is ambiguous. (D)
Explanation:
First, note that if the price of coffee beans, used in the manufacture of coffee decreases, the price of coffee sold to consumers will decrease, because it takes a lesser amount in manufacturing than it used to, therefore this reduction in manufacturing costs is reflected in the selling price.
Next, it is hard to tell whether this reduction in equilibrium price will affect quantity demanded, because, at the same time, the price of cream ( a complementary good) increases, and since both goods are complementary, they are bought together, and the effect of the reduction in the price of coffee might not necessarily caused an increase in the quantity demanded because this effect is cancelled out by the increase in the price of cream, hence the effect on quantity is ambiguous.