If Microsoft wanted to prove to the Justice Department that its Windows software has many substitutes that personal computer owners can use,Microsoft hopes to find
A) that the demand for Windows' is inelastic.
B) that the demand for Windows is elastic.
C) a large positive value for the cross elasticity of Windows and other software.
D) a negative income elasticity for Windows.
E) a positive income elasticity for Windows.

Question

Quizplus · Accepted Answer

Cross elasticity of demand measures the responsiveness of demand for a service or product to a change in the price of a substitute or complement. Microsoft would want to find a large positive value for the cross elasticity of Windows and other software, indicating that there are many substitutes available for users instead of Windows. This would support Microsoft's argument that there is enough competition in the market and that they do not have a monopoly.

If Microsoft Wanted to Prove to the Justice Department That