1.)A glass company making windows for houses also makes windows for other things

Question

1.)A glass company making windows for houses also makes windows for other things (cars, boats, planes, etc.). We would expect its supply curve for house windows to be: And if you can explain why please otherwise I won't rate your answer. a.)No different than that of firms which only make those windows b.)Dependent on the demand for boat and plane windows c.)Relatively more elastic than those of firms which only make house windows d.)Relatively more inelastic than those of firms which only make house windows 2.)Which product is to be the most price elastic between housing or automobiles?

Explanation / Answer

Based on my knowledge of economics, I would select choice D. In layman's terms, the sale of a multi-purpose product would be less elastic than a single-purpose product because the product is less dependent upon the fluctuations in the market of the applications. In your case, the glass company making windows for houses, cars, boats, etc. has markets to fall back on should one in particular do so well making its supply curve more inelastic. This is in contrast with the glass company making only windows for houses or for only boats since their prices will be directly dependent on the demand for houses and boats, respectively. As for question 2, simply because the prices of automobiles is less subject to fluctuation in comparison to the prices for houses, the windows for housing will probably be more price elastic.

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