Who has a higher bargaining power if the demand for the good being transacted is price-elastic?
What will be an ideal response?
The buyer of the good has a higher bargaining power if his demand for the good is price- elastic. This is because the seller knows that if he charges a higher price for the good, the buyer will not purchase the good.
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Refer to the information. International trade in this case:
Answer the question on the basis of the following information for a private open economy. The letters Y, C, I g , X, and M stand for GDP, consumption, gross investment, exports, and imports respectively. Figures are in billions of dollars.
A. has an expansionary effect on GDP.
B. has a contractionary effect on GDP.
C. has no effect on GDP.
D. is causing inflation in this economy.
The post-World War II record shows that recessionary gaps may be long-lasting because ____ tends not to occur.
A. deflation B. reflation C. stagflation D. disinflation