Which of the following should be the Supreme Court's preferred course of action, if it wants to determine the degree with which margarine can act as a substitute product for butter due to the latter's increase in prices?

Question

Quizplus · Accepted Answer

Cross-elasticity of demand measures the responsiveness of demand for one product (butter) to a change in the price of another product (margarine). If the cross-elasticity of demand between margarine and butter is high, it means that an increase in the price of butter will lead to a higher demand for margarine and vice versa. By determining the cross-elasticity of demand, the Supreme Court can understand how much of a substitute margarine is for butter, which will help them in making a decision. The other options (A, B, D, and E) are not relevant to determining the degree with which margarine can act as a substitute product for butter.

Which of the Following Should Be the Supreme Court's Preferred