In an Economic Model, Assumptions

question 221

Multiple Choice

In an economic model, assumptions

• A) must be applicable to all real-world situations.
• B) must be eliminated before being used to make sure the model is realistic.
• C) are not important in determining the usefulness of the model.
• D) define the set of circumstances in which the model is most likely to be applicable in the real world.

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Definitions:

Secret Price Cuts

Price reductions on goods or services that are not publicly advertised or disclosed to all customers.

Less Attractive

This describes a decrease in appeal or desirability of an object, person, or concept compared to another.

Stable Demand

A market condition where the desire for a product or service remains consistent over a period of time.

Quality Competition

A market scenario where companies compete based on the quality of their offerings rather than on price alone, aiming to attract discerning customers.