« previous next »

Author Question: The cross-price elasticity between natural gas and heating oil is estimated to be 2.3 . The ... (Read 44 times)

student77

  • Hero Member
  • *****
  • Posts: 567
on: Jun 29, 2018
The cross-price elasticity between natural gas and heating oil is estimated to be 2.3 . The cross-price elasticity between natural gas and electricity is estimated to be -0.8 .
 
  What is the relationship between natural gas and heating oil? What is the relationship between natural gas and electricity? Explain.

Question 2

A rule that specifies the highest price that a regulated firm is permitted to set is called
 
  A) rate of return regulation.
  B) price cap regulation.
  C) maximum price regulation.
  D) average/marginal cost pricing.


bdobbins

  • Sr. Member
  • ****
  • Posts: 326
Reply #1 on: Jun 29, 2018
Answer to Question 1

Because the cross-price elasticity is positive, natural gas and heating oil are substitutes. As the price of one goes up, the demand for the other increases. On the other hand, natural gas and electricity are complements because the cross-price elasticity is negative. When the price of one goes up, the demand for the other falls.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

For about 100 years, scientists thought that peptic ulcers were caused by stress, spicy food, and alcohol. Later, researchers added stomach acid to the list of causes and began treating ulcers with antacids. Now it is known that peptic ulcers are predominantly caused by Helicobacter pylori, a spiral-shaped bacterium that normally exist in the stomach.

Stages of a Neurospora cross Stages of a Neurospora cross
Cross section of Nasal Cavity Cross section of Nasal Cavity
Bill Viola. Room for St. John of the Cross. 1983. Bill Viola. Room for St. John of the Cross. 1983.
Cross-arm stretch of cervical muscles with neck in forward flexion. Cross-arm stretch of cervical muscles with neck in forward flexion.
Heating the amosphere with no greenhouse gases Heating the amosphere with no greenhouse gases
Phenotype proportions in the progeny of a dihybrid cross performed by Mendel Phenotype proportions in the progeny of a dihybrid cross performed by Mendel
Video: Hormonal regulation of pregnancy - weeks 17 through 38

For a complete list of videos, visit our video library