Which of the following examples accurately shows the cross-price elasticity of demand?
a. A +3 percent price for rye bread and a +6 percent demand for oatmeal bread equals a cross-price elasticity of demand of +18.
b. A +9 percent price for roses and a +11 percent demand for tulips equals a cross-price elasticity of demand of +2.
c. A +7 percent price for bar soap and a +21 percent demand for liquid soap equals a cross-price elasticity of demand of +28.
d. A +10 percent price for chocolate chip cookies and a +30 percent demand for oatmeal raisin cookies equals a cross-price elasticity of demand of +3.
d. A +10 percent price for chocolate chip cookies and a +30 percent demand for oatmeal raisin cookies equals a cross-price elasticity of demand of +3.
You might also like to view...
The conventional way to regulate a natural monopolist is to force it to charge a price equal to marginal cost.
Answer the following statement true (T) or false (F)
Marginal revenue is less than price for
A) all price searchers. B) all price takers. C) price searchers who can't restrict price reductions to the new purchases they want to attract. D) sellers who face inelastic demand curves.
Critics of the RBC approach argue that it's hard to find productivity shocks large enough to cause business cycles. What is the RBC counterargument to this criticism?
A) Business cycles are always and everywhere a monetary phenomenon. B) Wars and military buildups could be considered productivity shocks. C) Business cycles could be caused by the accumulation of small productivity shocks. D) Business cycles are often caused by unobservable productivity shocks, which aren't apparent at the time they occur.
If price is greater than average variable cost, then the firm
a. should cease production b. earns economic profits c. just breaks even d. makes an economic loss e. may make either an economic profit or loss