The Demand Curve for a Good Is Very Unlikely to Be

question 182

Multiple Choice

The demand curve for a good is very unlikely to be perfectly vertical because

• A) scarcity and limited income restrict the ability of consumers to afford goods as they become very expensive.
• B) as the price of a good rises to high enough levels, the incentive for other suppliers to invent new substitutes for the good increases.
• C) consumers generally do not care about the price of the goods they consume.
• D) both a and b are true.

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Definitions:

Purpose

The reason for which something is done or created or for which something exists.

Value-based Management

Value-based management is a business management strategy focused on maximizing shareholder value through the alignment of company processes, resources, and initiatives toward this objective.

Economic Value

The maximum amount a consumer is willing to pay for an item minus the actual price of the item.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives, often involving risk and uncertainty.