The Most Important Determinant of the Price Elasticity of Demand

question 289

Multiple Choice

The most important determinant of the price elasticity of demand for a good is

• A)the definition of the market for a good.
• B)the availability of substitutes for the good.
• C)the share of the good in the consumer's budget.
• D)whether the good is a necessity or a luxury.

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Definitions:

Annual Dividends

Regular payments made by a company to its shareholders out of its profits or reserves on a yearly basis.

Rate of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's cost.

Annual Dividend

The total amount of dividend that a company pays to its shareholders in a year.

Rate of Return

A financial metric expressing the percentage of profit or loss on an investment over a specific period, serving as a key indicator of investment efficiency.