The cross-price elasticity between a pair of complementary goods will be
A) positive.
B) negative.
C) zero.
D) positive or zero depending upon the strength of the relationship.
B
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Suppose that on a Saturday night at 10 pm, a large hotel has 300 vacant rooms, with little expectation of renting them at such a late hour on a weekend. A traveler comes in the door, looking a bit down on his luck, and asks how much a room will cost. Since he can’t afford the normal rate of $150, the night manager decides to let him stay in the room for only $40. Is it likely that this decision reduced, or increased, the hotel’s profits? Explain your answer.
What will be an ideal response?
Information asymmetry is present when:
A. one person knows more than another. B. there is risk. C. when both parties are lacking the same information. D. All of these statements are true.
If a price ceiling is imposed, then:
a. the market supply curve will shift to the right. b. the market demand will shift to the left. c. a shortage of product will result. d. the government would be required to buy-up the surplus product. e. the market equilibrium price is below the level the government wishes to achieve.
An example of an intermediate good would be:
A. the rice used to make Chex cereal. B. a bag of Uncle Ben's rice sold to consumers. C. a bag of Quaker's rice cakes sold to consumers. D. All of these are intermediate goods