If Microsoft Wanted to Prove to the Federal Court That

question 46

Multiple Choice

If Microsoft wanted to prove to the federal court that its Windows software has many substitutes that personal computer owners can use, Microsoft hopes to find

• A) a positive income elasticity for Windows.
• B) that the demand for Windows is inelastic.
• C) that the demand for Windows is elastic.
• D) a large positive value for the cross elasticity of demand for Windows and other software.
• E) a negative income elasticity for Windows.

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Definitions:

Substitutes

Products or services that can serve as replacements for each other, fulfilling the same need or desire.

Market Segments

Groups of potential customers with similar needs, wants, and characteristics that a company targets with its products or services.

Deep Discounts

Significant reductions in price offered to consumers, often to clear inventory or boost sales temporarily.

Monopolist

A single supplier in a market who has exclusive control over a product or service, often resulting in limited competition.