When the Price of a Product Increases, the Passage of Time

question 61

Multiple Choice

When the price of a product increases, the passage of time usually causes the price elasticity of demand for the product to become

• A) less elastic.
• B) more elastic.
• C) smaller and smaller in an absolute value.
• D) approximately equal to zero in the long run because of scarcity.

---

Definitions:

Par Value

The nominal or face value of a bond, share of stock, or another financial instrument, as stated by the issuing company.

Fair Value

The capital acquired from the sale of an asset or expended in the transfer of a liability in a smooth transaction among market intermediaries on the measurement date.

Acquisition

The process by which one company takes over the control of or purchases another company.

Appraised Value

An estimate of the fair value of an asset, determined by a professional appraiser based on inspection and analysis of the asset and market conditions.