The demand for a product is more elastic
a. When it has few substitutes
b. In the long-run
c. When the expenditure on the product represent a small portion of the budget
d. When the product is broadly defined
b
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The two tendencies of a firm in a cartel are the incentive to:
A. cheat to maximize joint profits and the incentive to raise prices. B. cheat and avoid collusion and the incentive to raise price to maximize the firm's share of profits. C. increase output in order to minimize per-unit cost and the incentive to reduce price in order to maximize joint profit. D. cooperate to maximize joint profits and to cheat on the agreement in order to increase the firm's share of the profit.
An antitrust agency is identifying the product market for Good X and determines that Good X and Good Y have a cross-price elasticity of 15.2. As a result of the cross-price elasticity, the antitrust agency is likely to ________ Good Y from Good X's product market as the products ________ compete as close substitutes.
A) exclude; do not B) exclude; do C) include; do not D) include; do