Biology Forums - Study Force

Firm A producing one good acquires another firm B producing another good. Price elasticity of demand for Firm A's good is -1.8 and Firm's B is -1.8 . Holding other things constant and assuming both goods are complements, the acquiring firm should
 a. lower prices on both goods with a larger decrease in Firm A's good
  b. lower prices on both goods with a larger decrease in Firm B's good
  c. Lower prices on both goods by the same amount
  d. Lower prices on both goods

QUESTION 2

In the linear breakeven model, the relevant range of output is that range where the linearity assumptions of the model are assumed to hold.
 a. true b. false

QUESTION 3

Vertical contracts aim to
 a. Incentivize the manufacturers to undertake costly activities, which they may not realize the full benefits of on their own
  b. Incentivize the retailers to undertake costly activities, which they may not realize the full benefits of on their own
  c. Incentivize the retailer and the manufacturer to undertake activities that reduce profits for the supply chain
  d. Both A&B

QUESTION 4

Firm A producing one good acquires another firm B producing another good. Price elasticity of demand for Firm A's good is -1.8 and Firm's B is -1.8 . Holding other things constant and assuming both goods are substitutes, the acquiring firm should
 a. Raise prices on both goods with a larger increase in Firm A's good
  b. Raise prices on both goods with a larger increase in Firm B's good
  c. Raise prices on both goods by the same amount
  d. Lower prices on both goods

QUESTION 5

The linear breakeven model excludes ____ from the analysis.
 a. financing costs
  b. taxes
  c. contribution margin
  d. a and b only
  e. a, b, and c

QUESTION 6

Vertical contracts that aim to decrease retailer prices typically
 a. Benefits the consumers, manufacturers and retailers
 b. Hurts all the manufacturers, consumers and retailers
 c. Benefit the manufacturer, hurt the consumer and retailer
  d. Benefit the retailer, hurt the manufacturer and consumer

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