Vincent M.
asked • 04/02/20I need help on two questions
2.22 Maureen just graduated from Rowan University with a degree in Finance, and has just moved to Manhattan in search of employment in investment banking. How has this impacted her elasticity of demand for business suits?
a) Elasticity decreases
b) Elasticity increases
c) No effect on elasticity
2.23 There are three brands of automobile tires in a market: DuraWheel, RoadGrip, and SafeSpin. Due to poor management, the company producing RoadGrip goes out of business. How does this impact the elasticity of demand for DuraWheel tires?
a) Elasticity decreases
b) Elasticity increases
c) No effect on elasticity
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1 Expert Answer
Lenny D. answered • 04/08/20
Tutor
4.8
(563)
Former Tufts Economics Professor and Wall Street Economist
The demand for suits will presumably rise. She will most like be less price sensitive.
As for the tires, the number and availabilty of substitutes has declined making the market less competitive. Steeper, less elastic demand.
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Steven B.
04/08/20