For an Increase in Demand, the Price Effect Is Smallest

question 20

Multiple Choice

For an increase in demand, the price effect is smallest and the quantity effect is largest

• A)when supply is least elastic.
• B)in the long run.
• C)in the short run.
• D)in the immediate market period.

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Definitions:

Transactions Costs

Expenses incurred during the purchase or sale of goods and services, which may include commissions, fees, and other charges.

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns.

Investor Aversion

A reluctance or aversion among investors to take on risky investments, preferring safer, more predictable returns instead.

Capital Gains

The increase in the value of an investment or real estate that gives it a higher worth than the purchase price.