Sales of shampoo by CleanHair, Inc., have recently decreased from 1,300 to 1,100 units in response to a price decrease from $7 to $5 by its main competitor. Assuming that everything else is being held constant, we can infer that
A. the cross-price ARC-elasticity (midpoints formula) between the two products is 2.
B. the cross-price ARC-elasticity (midpoints formula) between the two products is -½.
C. the cross-price ARC-elasticity (midpoints formula) between the two products is ½.
D. the cross-price ARC-elasticity (midpoints formula) between the two products is -2.
Answer: C
You might also like to view...
A decrease in the price of pizza will lead to a(n):
A. decrease in the quantity of pizza demanded. B. decrease in the number of consumers. C. increase in the quantity of pizza demanded. D. increase in the demand for pizza.
Refer to Figure 12-2. Why is the total revenue curve a ray from the origin?
A) because the firm can sell its product at a constant price B) because revenue increases at a decreasing rate C) because the firm must lower its price to sell more D) because revenue increases at an increasing rate
Which of the following would help to avert a healthcare crisis?
a. requiring employers to pick up 100 percent of the healthcare costs for their employees b. discouraging medical savings accounts since these provide additional funds for medical care, and therefore, they are likely to drive up medical prices c. discouraging the purchase of health insurance plans with small co-payments d. structural changes that would increase the competitiveness of the health insurance and medical services markets
Private property rights involve
A) exclusive rights to use, transfer, and exchange the property. B) exclusive rights to use property, but not to exchange the property. C) rights to enjoy the property in any way desired but not to transfer or exchange the property. D) rights granted by the government for renewable terms of 100 years or more.