The Price Elasticity of Demand for Apartments Is 1

question 95

Multiple Choice

The price elasticity of demand for apartments is 1.3,while the price elasticity of demand for toothpicks is 0.4.The likely reason for the difference is that

• A) there are few substitutes for toothpicks.
• B) apartments are chosen over a long period of time.
• C) the fraction of income spent on toothpicks is very small.
• D) toothpicks are a necessity.
• E) apartments are a luxury.

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A calculation used in decision-making under risk, representing the sum of possible outcomes weighted by their respective probabilities and monetary impacts.

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A decision-making approach that minimizes the expected loss due to not choosing the best option under uncertainty.