When the cross price elasticity between good X and other related goods is positive and very low, firm X can be assumed to have:
A) minimal market power.
B) moderate market power.
C) a significant amount of market power.
D) virtually no market power.
C
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By 1937, when a new recession began in the midst of the Great Depression,
A) GDP had almost recovered to its 1929 level, but unemployment was still above the 1929 level. B) unemployment had almost fallen back to its 1929 level, but GDP had yet to recover to its 1929 level. C) neither GDP nor unemployment had returned to near their 1929 levels. D) both GDP and unemployment had returned to near their 1929 levels.
A possible market solution that a reputable firm can engage in when faced with the lemons problem is
A) to offer a warranty. B) to engage in externalities. C) to create asymmetric information. D) to use average cost pricing.