Speculation Serves the Market in Which of the Following Ways

question 178

Multiple Choice

Speculation serves the market in which of the following ways?

• A)It helps smooth out price fluctuations.
• B)It raises the price of certain goods.
• C)It manufactures a demand for goods that would not ordinarily be found.
• D)It allows risk takers the ability to make large amounts of economic rent.

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Definitions:

Over-Differentiation

The excessive creation of variations of products that confuse rather than satisfy consumer needs.

Peak Efficiency

The state of operating at maximum productivity with the lowest waste of resources or effort.

Non-Price Competition

Strategies used by companies to attract customers based on factors other than price, such as quality, service, and brand loyalty.

Monopolistic Competitor

A firm in a market that sells products that are differentiated from those of competitors, but not to the extent of a monopoly, leading to some degree of market power.