If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?
a. Both the equilibrium price and quantity would increase.
b. Both the equilibrium price and quantity would decrease.
c. The equilibrium price would increase, and the equilibrium quantity would decrease.
d. The equilibrium price would decrease, and the equilibrium quantity would increase.
a
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An expenditure maximizing multi-product firm will set the same relative prices as a welfare maximizing firm
Indicate whether the statement is true or false
According to the capture hypothesis, it appears that regulators eventually end up
A) adopting policies that benefit the firms being regulated. B) adopting policies that benefit consumers at the expense of the regulated firms. C) adopting policies that benefit no one. D) satisfying neither producers nor consumers, but striving to control as much as possible.
Which of the following might lead a nation to engage in international trade? a. Differences in natural endowments such as climate. b. Differences in skills of the labor force
c. Differences in endowments of natural resources. d. All of the above.
Apple improves the resolution of its iPhone camera by doubling the number of megapixels. This is an example of vertical differentiation.
Answer the following statement true (T) or false (F)