Suppose that T-Mobile's cross price elasticity for international calls is 7.5. If Verizon (=T-Mobile'scompetitor) reduced its international charges by 3%, how would this affect the demand for T-Mobile's demand?Demand would rise by 2.5%Demand would rise by 22.5%.Demand would drop by 2.5%.Demand would drop by 22.5%. A monopolistic firm faces a demand curve thatOthe same as the marginal cost curve.is the same as the marginal revenue curve.is below the marginal revenue curve.is above the marginal revenue curve.

1. Cross price elasticity of demand = %age change in demand of good A / %age change in price of good…

Suppose that T-Mobile's cross price elasticity for international calls is 7.5. If Verizon (=T-Mobile's competitor) reduced its international charges by 3%, how would this affect the demand for T- Mobile's demand? |0|0|0|0 O Demand would rise by 2.5% Demand would rise by 22.5%. O Demand would drop by 2.5%. O Demand would drop by 22.5%.