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You are considering using good G as a loss leader (i.e. dramatically reducing its price to drive buyers to your business) You should select a
You are considering using good G as a "loss leader" (i.e. dramatically reducing its price to
drive buyers to your business)
You should select a good G that has:
1. a high/low (pick one) own-price elasticity of demand. Explain
2. a high/low (pick one) cross elasticity with its complements that you, also, sell. Explain
3. a high/low (pick one) cross elasticity with its substitutes that you, also, sell. Explain
4. Offer an example of a "good G" and explain why it is a good choice based upon 1., 2., and 3.
above.
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