Firm A producing one good acquires another firm B producing another good. Price elasticity of demand for Firm A's good is -1.8 and Firm's B is -1.8 . Holding other things constant and assuming both goods are substitutes, the acquiring firm should
a. Raise prices on both goods with a larger increase in Firm A's good
b. Raise prices on both goods with a larger increase in Firm B's good
c. Raise prices on both goods by the same amount
d. Lower prices on both goods
c
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In 2014, the price of peanuts increased. In the market for peanut butter, this change lead to ________ and which therefore ________ the price of peanut butter and ________ the quantity of peanut butter
A) a decrease in the supply; increased; decreased B) an increase in supply; decreased; increased C) a decrease in demand; decreased; decreased D) an increase in demand; increased; increased
If technological breakthroughs in the internet cause large numbers of firms to consider investment projects they hadn't previously thought of, then
A) a shift in the supply of loanable funds will cause interest rates to rise. B) a shift in the supply of loanable funds will cause interest rates to fall. C) a shift in the demand for loanable funds will cause interest rates to rise. D) a shift in the demand for loanable funds will cause interest rates to fall. E) there will be an excess supply of loanable funds.