The article "Samsung Stung by Apple Moves" related to the price cuts for the iPhone indicates that
A)The cross-price elasticity for iPhones and other cell phones produced by Samsung was negative.
B)Apple lowered the price for the iPhone because the cross-price elasticity between it and the other competitors was positive.
C)The percentage change in the quantity demanded for the substitute cell phones was increasing less than the percentage change in the price.
D)The demand for the iPhone was inelastic.

Question

Quizplus · Accepted Answer

The article suggests that Apple lowered the price for the iPhone to counteract competition from Samsung and other competitors. This implies that the cross-price elasticity between the iPhone and other cell phones is positive, meaning that as the price of the iPhone decreases, consumers are more likely to switch from their current phones to the iPhone. Therefore, choice B is the best answer.

The Article "Samsung Stung by Apple Moves" Related to the Price