The Price Elasticity of Demand for a Product Tends to Be

question 9

Multiple Choice

The price elasticity of demand for a product tends to be greater the

• A) more close substitutes for it there are.
• B) fewer close substitutes for it there are.
• C) lower its price.
• D) more broadly the product is defined.
• E) shorter the time span being considered.

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Definitions:

Short-run Cost Function

The costs a company incurs in the production of goods or services within a short period, considering some inputs are fixed.

Long-run Cost Curve

A graphical representation showing the minimum cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Hair Dryers

Electrical devices used to blow dry hair by emitting warm air.

Economies of Scope

Cost advantages that arise from a firm or company expanding its product line or markets, exploiting shared resources or technologies.