If the Price of Walnuts Rises,many People Would Switch from Consuming

question 280

Multiple Choice

If the price of walnuts rises,many people would switch from consuming walnuts to consuming pecans.But if the price of salt rises,people would have difficulty purchasing something to use in its place.These examples illustrate the importance of

• A)the availability of close substitutes in determining the price elasticity of demand.
• B)a necessity versus a luxury in determining the price elasticity of demand.
• C)the definition of a market in determining the price elasticity of demand.
• D)the time horizon in determining the price elasticity of demand.

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Definitions:

Hydraulic Car Smasher

A machine designed to compress and crush cars using hydraulic pressure for purposes such as recycling or disposal.

Marginal Cost

The extra cost incurred by producing one additional unit of a product or service.

Dispose of Cars

The process of discarding or recycling automobiles that are no longer in use or are considered waste.

Variable Costs

Expenses that vary in relation to the amount of production or business operations.