Lack of Good Substitutes for a Particular Product Affects Its

question 1

Multiple Choice

Lack of good substitutes for a particular product affects its demand curve as follows:

• A) Makes it more elastic
• B) Makes it less elastic
• C) Makes it unitary elastic
• D) Doesn't affect it at all
• E) Cannot be determined without knowing the supply curve

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Definitions:

Growth Rate

The rate at which a company's sales, earnings, or other chosen financial indicator increases over a period of time.

Market Risk Premium

The additional return expected by an investor for holding a risky market portfolio instead of risk-free assets.

Risk-Free Rate

The hypothetical yield on a risk-free investment, often exemplified by state-issued bonds.

Cost Of Equity

The return that a company must offer investors to compensate for the risk of investing in its shares.