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

Question

Quizplus · Accepted Answer

A large positive value for the cross elasticity of demand between Windows and other software would indicate that Windows and these other software products are substitutes, meaning that if the price of Windows increases, the demand for the other software increases, and vice versa. This supports the argument that there are many substitutes available for Windows.

If Microsoft Wanted to Prove to the Federal Court That