If the price elasticity of supply is equal to infinity and the price was to fall, the quantity supplied would:
A. decrease slightly.
B. fall to zero.
C. not change.
D. increase.
Answer: B
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Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result
A) the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease. B) the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. D) both the equilibrium price and quantity of MP3 players will increase.
Which of the following statements is TRUE about the market demand curve for labor?
A) The market demand curve is the sum of the individual firm's demand curve. B) The market demand curve will be perfectly inelastic since firms need labor. C) The market demand curve shows the quantities of labor demanded by all firms in the industry at various marginal products. D) The market demand curve depends upon labor productivity, the wage rate and the price of the final product.
How is the writer of an option affected by changes in its stock price?
If bad weather destroyed half of the current coffee crop, ceteris paribus, it would:
a. increase the demand for coffee. b. decrease the demand for coffee. c. increase the demand for tea d. decrease the demand for tea.