Which of the Following Causes Demand to Be More Elastic

question 134

Multiple Choice

Which of the following causes demand to be more elastic with respect to price?

• A) Shorter periods of time to adjust to a change in price.
• B) A steeper demand curve for a given price and quantity.
• C) Fewer substitutes.
• D) A high ratio of price to income.

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Definitions:

Required Return

The minimum expected return an investor demands for investing in a particular asset, considering the risk involved.

Correlation Coefficients

Statistical measures that indicate the extent to which two variables fluctuate together.

Risk-Free Rate

The rate of return on an investment with no risk of financial loss, often represented by the yield on government securities.

Market Risk Premium

The additional return an investor expects to receive from a market portfolio over a risk-free rate due to the inherent risks.