« previous next »

Author Question: The cross-price elasticity between natural gas and heating oil is estimated to be 2.3 . The ... (Read 45 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?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

A seasonal flu vaccine is the best way to reduce the chances you will get seasonal influenza and spread it to others.

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

A Controlled Cross between Two Plants A Controlled Cross between Two Plants
Cross section of Nasal Cavity Cross section of Nasal Cavity
Mechanism of penicillin: (a) Bacterial cell wall strengthened by peptide cross-links. (b) Penicillin ... Mechanism of penicillin: (a) Bacterial cell wall strengthened by peptide cross-links. (b) Penicillin ...
Use a vacuum or fuel line hose over the spark plug to install it without danger of cross-threading ... Use a vacuum or fuel line hose over the spark plug to install it without danger of cross-threading ...
Trihybrid cross to verify independent assortment Trihybrid cross to verify independent assortment
Video: Vasectomy

For a complete list of videos, visit our video library