Question

Acquiring a firm that sells a substitute good will (1pts) Question 19 - Acquiring a firm that sells a substitute good will Select c) Make MR>MC as your answer c) Make MR>MC Select a) Make the demand curve more inelastic as your answer a) Make the demand curve more inelastic Select d) Will have no effect on the demand curve as your answer d) Will have no effect on the demand curve Select b) Make the demand curve more elastic as your answer b) Make the demand curve more elastic

Answer 1

Answer:

Make the demand curve more inelastic

Explanation:

Substitute goods are goods that can be used in place of another good.

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Acquiring a firm that sells a substitute good will reduce the amount of competition a firm's good faces so consumers would have less options of goods available to purchase. This makes their demand more inelastic. If price increases, consumers have little or no options they can substitute to, so they continue to demand for the product.