Demand Sensitivity Depends on All of the Following Except

question 109

Multiple Choice

Demand sensitivity depends on all of the following except:

• A) how low is the price of the good.
• B) the sensitivity of firms' output to changes in its price.
• C) the consumer's income.
• D) the availability and closeness of substitutes.
• E) the amount of time a consumer has to adjust to price changes.

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Definitions:

Compounded Quarterly

Refers to the method of applying interest to an existing principal amount and any accrued interest every quarter or three months.

Effective Yield

A measure of the return on an investment, taking into account the effect of compounding interest.

Simple Annualized

A method of calculating the return on an investment by annualizing its simple interest without accounting for compounding.

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a specified period of time.