Which of the following is a determinant of the price elasticity of demand for an item?
A) the availability of a close substitute for the item
B) the percentage of a consumers budget allocated to expenditures on the item
C) the amount of time available to adjust to a change in the price of the item
D) All of the above are correct.
D
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The Taylor rule implies that the Fed should set the federal funds target based on which of the following?
A) the proportionate gap between actual real GDP and a measure of potential real GDP B) the current deviation of the actual inflation rate from the Fed's inflation objective C) an estimated long-run real interest rate D) all of the above
Which of the following is NOT a characteristic of monopolistic competition?
A) Entry and exit is restricted. B) Firms compete on price. C) A large number of firms compete. D) Firms compete on product quality.
Primary reserves are held in the form of ____ and ____; secondary reserves are held in the form of _____.
Fill in the blank(s) with the appropriate word(s).
Which of the following is NOT a reason for the government to regulate a nonmonopolistic industry?
A. to protect consumer interests B. market failures C. asymmetric information D. to allow firms to achieve the profit maximizing output