An Input with a Price-Inelastic Demand for Its Services

question 64

Multiple Choice

An input with a price-inelastic demand for its services

• A) has few close substitutes.
• B) has a backward-bending supply curve.
• C) produces a product for which the demand is perfectly elastic.
• D) has a high market price.
• E) has a value of the marginal product curve that is horizontal.

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Definitions:

Annual Demand

Annual demand refers to the total quantity of a product or service that consumers are willing and able to purchase over a year.

Average Collection Period

The average time it takes for a business to collect payments owed by its customers.

Credit Obligations

Financial commitments, such as loans or credit card debt, that an individual or entity is legally required to repay.

Inventory Carrying Cost

The total cost of holding inventory, including storage, insurance, taxes, depreciation, and opportunity costs, among others.