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In a free and competitive market? 1) there will be no surplus 2) there will be no shortage 3) demand and supply determine market outcome
In a free and competitive market?
1) there will be no surplus
2) there will be no shortage
3) demand and supply determine market outcome
4) all of the above
Assume, the cross-price elasticity Ex,y is positive, then
if the price of X goes down, demand for Y will go down
if the price of Y goes up, demand for X will go up
if Ex,y >1, then 1% decrease in price of one good will lead to more than 1% decrease in demand of the other good
All the above
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