Aluminum can be used to produce cable (buyers have elastic demand) or to make aircraft (inelastic demand). The ingots can be easily resold. If Alcoa vertically integrates to prevent resales, which industry will it choose? Industry Demand elasticity for aluminum Integrated or not? cookware elastic (e=-1.6) electric cable elastic (copper substitute) car parts elastic (e=-1.5) iron and steel inelastic (no substitute) aircraft inelastic (no substitute then)

Aluminum can be used to produce cable (buyers have elastic demand) or to make aircraft (inelastic demand). The ingots can be easily resold. If Alcoa vertically integrates to prevent resales, which industry will it choose? Industry Demand elasticity for aluminum Integrated or not? cookware elastic (e=-1.6) electric cable elastic (copper substitute) car parts elastic (e=-1.5) iron and steel inelastic (no substitute) aircraft inelastic (no substitute then)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter12: More Realistic And Complex Pricing

Section: Chapter Questions

Problem 12.1IP

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