Which of the Following Is a Possible Disadvantage of Real

question 107

Multiple Choice

Which of the following is a possible disadvantage of real estate investments?

• A)lack of involvement in property maintenance
• B)hedge against inflation
• C)illiquidity
• D)lack of financial risk
• E)capital requirements for total venture may be high

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Definitions:

Profit-Maximizing Firm

A company that chooses its level of output and pricing strategy to achieve the highest possible profit based on its costs and the market demand.

Price Elasticity Of Demand

A measure in economics indicating how the quantity demanded of a good changes in response to a change in its price.

Marginal Cost

The increase in total cost that arises from an increase in the production of one additional unit of a good or service.

Profit-Maximizing Seller

A seller who adjusts prices and production levels to achieve the highest possible profit from their goods or services.