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Firm a Producing One Good Acquires Another Firm B Producing

Question 28

Multiple Choice

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

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