The Department of Justice could use the cross-price elasticity between products sold at Staples and Office Max to show that the firms are very similar.

Question

Quizplus · Accepted Answer

Cross-price elasticity measures the responsiveness of demand for one product to changes in the price of another product. If Staples and Office Max have a high cross-price elasticity, it means that their products are close substitutes and consumers are likely to switch between the two brands. This would suggest that the firms are competing directly with each other and would support the Department of Justice's argument that the proposed merger of Staples and Office Max would reduce competition within the office supply market.

The Department of Justice Could Use the Cross-Price Elasticity Between