Firm A producing one good acquires another firm B producing another good. The cross price elasticity of demand for the goods owned by each firm is -1.4 . Holding other things constant, the acquiring firm should
a. Raise prices on both goods
b. Lower prices on both goods
c. Raise price on the acquired good only
d. Need more information
b
You might also like to view...
The market power enjoyed by a particular producer depends on the number of firms in the industry
a. True b. False Indicate whether the statement is true or false
Refer to the information provided in Figure 33.3 below to answer the question(s) that follow.
Figure 33.3Refer to Figure 33.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. If shoes are a normal good and income in this country rises, then we would expect
A. the number of pairs of shoes imported into this country to increase. B. the number of pairs of shoes imported into this country to decrease. C. the number of pairs of shoes exported from this country to decrease. D. the number of pairs of shoes exported from this country to increase.