Justin's bank employs tellers and ATMs. Both are able to serve clients in the exact same way and therefore are perfect substitutes. Describe the elasticity of substitution between the two inputs
What will be an ideal response?
The elasticity is infinite. The firm is able to freely substitute the goods since they are perfect substitutes (without altering the MRTS).
Economics
You might also like to view...
The interest rate private banks charge each other for lending reserves is called the federal funds rate.
a. true b. false
Economics
A firm practicing direct price discrimination will charge lower prices to
a. Consumers with an elastic demand b. All consumers c. Consumers known to have an inelastic demand d. Consumers known to have a unitary elastic demand
Economics