A 10 Percent Increase in the Price of Root Beer

question 45

Multiple Choice

A 10 percent increase in the price of root beer causes a 5 percent increase in the quantity demanded of orange soda.This means that

• A)root beer and orange soda are substitutes
• B)root beer and orange soda are complements
• C)the cross-price elasticity of demand is elastic
• D)the cross-price elasticity of demand is equal to 2
• E)the cross-price elasticity of demand is equal to -2

Analyze the effects of scaling inputs on output and cost in the context of economies and diseconomies of scale.

Interpret diagrams related to economies and diseconomies of scale, minimum efficient scale, and constant returns to scale.

Distinguish between the phases of economies of scale, constant returns to scale, and diseconomies of scale in the long-run.

Estimate the impact of input adjustment on long-run average total cost within different scales of production.

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