If the Value of the Price Elasticity of Demand Is

question 9

Multiple Choice

If the value of the price elasticity of demand is less than one then:

• A) Demand is very sensitive to price.
• B) Demand is not very sensitive to price.
• C) Supply is very sensitive to price.
• D) Supply is not very sensitive to price.

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Definitions:

Zero

A numerical value representing nothing or the absence of any quantity.

American Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified asset at a certain price before the option expires.

Asset Price

The value at which an asset is bought or sold on the market.

Exercise Price

The cost at which an option holder has the right to buy or sell the base security.