Why Should We Never Assume That an Inelastic Demand Curve

question 10

Multiple Choice

Why should we never assume that an inelastic demand curve is a perfectly inelastic demand curve?

• A)because there has never been evidence of a perfectly inelastic demand curve.
• B)because an inelastic demand curve may be perfectly inelastic at some times but not others.
• C)because perfectly inelastic demand curves are rare.
• D)because an inelastic demand curve may be elastic at high prices.

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Definitions:

Real Estate Market

The market segment in which land and the buildings on it are bought, sold, or rented, involving residential, commercial, and industrial properties.

Capital Structure

The mix of different forms of external funds and equity that a company uses to finance its operations and growth.

Debt and Equity

Two of the main ways companies can raise capital; debt involves borrowing money, whereas equity involves selling a stake in the company.

Equity Account

An account that represents the owner's equity or interest in a company, usually comprising investments made by the shareholders and retained earnings.