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Cross price elasticity between your product and another firm's product is found to be - 0 . 8 . The other firm lowers the price
Cross price elasticity between your product and another firm's product is found to be The other firm lowers the price of its product. Which of the following is correct, concerning a profit maximizing optimal response by you, holding other factors constant?
The products are complements, and you should raise your price.
The products are complements, and you should lower your price.
The products are substitutes, and you should raise your price.
The products are substitutes, and you should lower your price.
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