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Economics Analysis

Question 1

Explain what would happen in the market for ramen noodles if the price of macaroni and cheese suddenly increased and remained high. Use basic supply and demand analysis in your answer and consider both the elasticity of demand and the cross-price elasticity of demand in your answer.

Answer

If the price of macaroni and cheese prices increase, as per the law of elasticity of demand, the price of ramen noodles will increase due to the fact that of cross elasticity between the products.

Question 2

Briefly explain how a specific firm uses product differentiation to gain market power. In your ...