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A Firm Produces and Sells Two Goods, a and B

Question 286

Multiple Choice

A firm produces and sells two goods, A and B. Good A is known to have many close substitutes; Good B makes up a significant portion of most families' budgets. From these facts, we would expect that the demand for Good A would be ______, while that of Good B would be________.


A) elastic; elastic also
B) inelastic; inelastic also
C) elastic; inelastic
D) inelastic; elastic

Correct Answer:

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