A Product with an Inelastic Demand Means That

question 118

Multiple Choice

A product with an inelastic demand means that

• A)consumers are relatively insensitive to a change in the price of the product.
• B)producers are relatively sensitive to a change in the quantity demanded.
• C)consumers are relatively sensitive to a change in the price of the product.
• D)producers are relatively insensitive to a change in the quantity demanded.
• E)consumers are relatively insensitive to a change in the quantity demanded.

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Definitions:

Risky Asset

An asset with an uncertain rate of return.

Indifference Curves

Indifference Curves represent a graphical representation of different bundles of goods between which a consumer is indifferent, showing preferences across different combinations of two products.

Risk-Averse

A description of an investor or investment strategy that prioritizes the minimization of risk over potential gains.

Expected Return

The average return of an investment, accounting for the likelihood of different outcomes, weighted by their probabilities.