Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?
a. The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve.
b. The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve.
c. Given two prices with which to calculate the price elasticity of supply, that elasticity would be the same for both curves.
d. A decrease in demand will increase total revenue if the steeper supply curve is relevant, while a decrease in demand will decrease total revenue if the flatter supply cure is relevant.
b
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When the price of Gatorade is $2 per bottle, the quantity demanded is 500 bottles per at the local grocer. When the price falls to $1 per bottle, the quantity demanded increases to 1000. Given this information, the demand for Gatorade is
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic.
An example of physical capital is:
A. a factory. B. a computer. C. a pen. D. All of the items are examples of physical capital.
Use the above figure. At an output equal to "Q" the total cost for the firm will be the area
A. OQEB. B. OQBC. C. OQDC. D. OQFA.
An increase in the price of a product
A. increases productivity. B. automatically increases wages. C. would probably decrease total revenues. D. raises the firm's demand for labor.