Suppose that your firm was accused of illegally conspiring with other sellers to act as a monopolist. In searching for an expert witness, you discover one economist who has calculate the cross elasticity of demand for your industry's product to be+2.05, while another economist has calculated the cross elasticity of demand to be +0.43. Which econimist whould your hire testify on behalf of your firm? Explain your answer

Take a shot.

Note that a +2.05 cross price elasticity means that if the price of some particular other product goes up by 1%, the demand for the firm's product (at the prevailing price) will go up by 2.05%. Compare this to an alternative measure of +0.43 Which econmist thinks the firm makes a product that has "good" substitutes?

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. Economics

    Buyers will opt out of markets in which: A. there are significant negative externalities. B. standardized products are being produced. C. there is inadequate information about sellers and their products. D. there are only foreign

  2. Economics

    you are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If the firm is

  3. economics

    3. Suppose that the total monthly demand for golf services is given by Q = 20 – P The marginal cost to the firm of each golfer is $1. If this demand function is based on the individual demands of 10 golfers, what is the optimal

  4. Civics

    Many of the amendments deal with rights of the accused in our system of justice. Describe some of the rights that the fifth through eighth amendments guarantee to people accused of a crime. Explain why the founders thought these

  1. History help

    15. The compromise of 1850 included which of the following? A. The Homestead Act B. The Fugitive Slave Act C. The Indian Removal Act D. The Missouri Act I think the answer is A,but not for sure.

  2. finance firm's sales on credit

    In general, the larger the portion of a firm's sales that are on credit, the: A. lower will be the firm's need to borrow B. higher will be the firm's need to borrow C. more rapidly credit sales will be paid off D. more the firm

  3. Finance/Accounting

    Milwaukee Surgical Supplies, Inc, sells on terms of 3/10, net 30. Gross sales for the year are $1,200,000 and the collections department estimates that 30 percent of the customers pay on the tenth day and take discounts, 40

  4. Econ

    Suppose the government wants to reduce the total pollution emitted by three firms in its area. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. The government wants to reduce

  1. Economics

    Suppose that a typical firm in a monopolistically competitive industry faces a demand curve given by: q = 60 - (1/2)p, where q is quantity sold per week. The firm's marginal cost curve is given by: MC = 60. 1. How much will the

  2. Civics

    Many of the amendments deal with the rights of the accused in our system of justice. Describe some of the rights that the Fifth through Eighth Amendments guarantee to people accused of a crime. Explain why the Founders thought

  3. Economics

    Two firms produce the same good and compete against each other in a Cournot market. The market demand for their product is P = 204 - 4Q, and each firm has a constant marginal cost of $12 per unit. MR1 = 204 - 8q1 - 4q2. Let q1 be

  4. Economics

    There are three industrial firms in Happy Vally. Initial Cost of Reducing Firm Pollution Level Pollution by 1 unit A 70 units $20 B 80 units $25 C 50 units $10 The government wants to reduce pollution to 120 units, so it gives

You can view more similar questions or ask a new question.