If price changes by one firm induce rival firms selling close substitutes to alter their prices,
A) firms will be able to raise their prices without fear of losing sales.
B) the demand curve will shift in response to a change in price.
C) the original firm faces an elastic demand curve.
D) the original firm faces an inelastic demand curve.
E) there is no competition between the rival firms.
B
You might also like to view...
The economy reaches full employment when the unemployment rate equals zero
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT necessary for price discrimination to occur?
A) The firm must be able to separate the market into identifiable groups. B) The firm must be selling a durable good. C) The firm must have a downward sloping demand curve. D) The firm has to be able to prevent resale of the product or service.