In the DuPont cellophane case, rivals accused DuPont of monopolizing cellophane. DuPont claimed that the relevant market was flexible wrapping material, such as wax paper and aluminum foil, rather than just cellophane. DuPont won the case. What type of evidence constituted DuPont’s defense?
What will be an ideal response?
DuPont needed to show that other flexible wrapping materials are substitutes for cellophane, which requires a large, positive cross elasticity. DuPont showed that as the price of other flexible wrapping materials increased, sales of cellophane declined substantially, showing a large, positive cross elasticity.
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As the ________ interest rate increases, the quantity of loanable funds demanded ________
A) real; increases B) real; decreases C) nominal; increases D) nominal; decreases
Under a production quota policy, the government can maintain a particular support price by reducing the quantity supplied. To maintain a particular support price, how must the quota amount change if the demand curve becomes more elastic?
A) Quota amount increases B) Quota amount decreases C) Quota amount does not change D) Quota amount depends on the supply curve