If There Are Very Few Substitutes for a Product, Then

question 169

Multiple Choice

If there are very few substitutes for a product, then an increase in its price causes

• A)a relatively large increase in quantity demanded.
• B)a relatively large decrease in quantity demanded.
• C)no change in quantity demanded.
• D)a relatively small increase in quantity demanded.
• E)a relatively small decrease in quantity demanded.

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Definitions:

Payback Period

The duration required for an investment to produce sufficient cash flow to recoup its original expense.

Depreciates

The process of allocating the cost of tangible assets over their useful lives, reflecting the decrease in value over time.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Required Rate

A specific rate of return or interest rate required by investors or lenders to compensate for the risk of an investment or loan.