All Other Things Being Equal, the __________ Substitutes for a Good

question 79

Multiple Choice

All other things being equal, the __________ substitutes for a good, the __________ the good's price elasticity of demand tends to be.

• A)fewer; higher
• B)more; higher
• C)more; lower
• D)There is not enough information provided to answer the question.

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Definitions:

Operating Leverage

An indicator of how increases in revenue lead to rises in operational profit, reflecting the company's balance of fixed to variable expenses.

Fixed Costs

Expenses that do not vary with production level or sales volume, such as rent, salaries, and insurance premiums.

Rent

Payment made by a tenant to a landlord for the use of a property.

Depreciation

The allocation of the cost of an asset over its useful life.