If a Product Has Lots of Substitutes

question 116

Multiple Choice

If a product has lots of substitutes:

• A)its income elasticity will be high.
• B)its price elasticity of demand will be low.
• C)the cross-price elasticity among those substitutes will be negative.
• D)the cross-price elasticity among those substitutes will be positive.

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Definitions:

Unregulated Monopolists

Firms that maintain exclusive control over a particular market or product without any oversight or restrictions from regulatory bodies.

Oligopolistic Markets

Markets dominated by a few large suppliers who have some control over the prices due to the limited number of competitors.

Predict

To make an educated guess about the future based on existing information or trends.

Price and Output Policy

Strategies adopted by firms or the government to determine the prices of goods and services and the level of production to meet economic objectives.