An Increase in Demand Will Increase Prices Most When Supply

question 153

Multiple Choice

An increase in demand will increase prices most when supply is

• A)elastic.
• B)unit elastic.
• C)inelastic (but not perfectly inelastic).
• D)perfectly inelastic.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Market Value

The current price at which an asset or service can be bought or sold.

Water Policy

Regulations and standards governing the use, management, and conservation of water resources to ensure sustainability and equitable access.