This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What does the sign (positive/negative) of the cross elasticity of demand tell us about the ... (Read 130 times)

melly21297

  • Hero Member
  • *****
  • Posts: 565
on: Jun 29, 2018
What does the sign (positive/negative) of the cross elasticity of demand tell us about the relationship between two goods?
 
  What will be an ideal response?

Question 2

Comment on the following statement: If a firm shuts down in the short run, it will earn zero economic profit.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

maya.nigrin17@yahoo.com

  • Sr. Member
  • ****
  • Posts: 324
Reply #1 on: Jun 29, 2018
Answer to Question 1

The sign of the cross elasticity of demand reveals whether two goods are substitutes or compliments: The cross elasticity of demand is positive for substitutes and negative for complements.

Answer to Question 2

The statement is false. In the short run, the firm has fixed costs to pay. If it shuts down, its total revenue will be equal to 0 . Therefore, the firm will suffer a loss equal to its fixed costs.


melly21297

  • Member
  • Posts: 565
Reply 2 on: Jun 29, 2018
Excellent

zacnyjessica

  • Member
  • Posts: 345
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

The U.S. Preventive Services Task Force recommends that all women age 65 years of age or older should be screened with bone densitometry.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

Cyanide works by making the human body unable to use oxygen.

Channel Cross-Sectional Area Channel Cross-Sectional Area
Nonverbal communications convey strong, powerful messages that may be negative or positive. Nonverbal communications convey strong, powerful messages that may be negative or positive.
Example of Index entry for an anatomic site with a cross-reference. Example of Index entry for an anatomic site with a cross-reference.
Cross section of peritoneum with related organs and structures. Cross section of peritoneum with related organs and structures.
Positive and Negative Punishment Positive and Negative Punishment
Mechanisms of positive control of transcription Mechanisms of positive control of transcription
Video: Normal and abnormal blood pH

For a complete list of videos, visit our video library