QUESTION 33 A major rival has entered bankruptcy and will exit your market. What is the expected...
QUESTION 33
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A major rival has entered bankruptcy and will exit your market. What is the expected impact on the elasticity of demand for your product?
A. Demand becomes more inelastic
B. Entrants do not impact demand elasticities
C. Demand becomes more elastic
D. We do not have enough information to answer this question
Homework Answers
Option A
Explanation: The exit of the competitor would reduce the number of substitutes of my product. So, the elasticity of demand of the product would decrease.
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QUESTION 33
A major rival has entered bankruptcy and will exit your
market. What is the expected...
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