The sign of the cross-price elasticity tells us whether two commodities are complements or substitutes, but the size of this elasticity measure tells us
a. how the supply side of the market reacts to changes in demand
b. whether the government should regulate the two markets
c. which technology producers use
d. how closely the two goods are related
e. whether or not excess profits can be made in either market
D
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Oftentimes when a company's share price is very "high" it will choose to split the stock price and offer each shareholder one share for each they currently hold. Explain why companies might do this and what the effect is on shareholder wealth
What will be an ideal response?
According to William Niskanen's model of bureaucracy, Congress tends to approve a bureau's budget at a level where
a. the marginal value of the last unit of the bureau's output is greater than the marginal cost. b. the marginal cost of the last unit of the bureau's output is greater than the marginal value. c. the marginal value of the last unit of the bureau's output equals the marginal cost. d. the marginal cost of the last unit of the bureau's output is zero.