If sellers respond to very small changes in price by adjusting their quantity supplied by extremely large amounts, the price elasticity of supply approaches
a. zero, and the supply curve is horizontal.
b. zero, and the supply curve is vertical.
c. infinity, and the supply curve is horizontal.
d. infinity, and the supply curve is vertical.
c
You might also like to view...
You operate a small poultry farm in east Texas. You sell most of your output through a regional distributor of poultry products in the area. In this case, you are subject to
a. Low buyer power b. High buyer power c. No buyer power d. All of the above
Which of the following is likely to be excluded while calculating the opportunity cost of attending university?
a. The cost of haircuts received during the school term b. The income from a part-time job that is forgone in order to attend classes c. Tuition fees paid during the school term d. The cost of required textbooks
GDP does not count:
A. the estimated value of homemaker production. B. state and local government purchases. C. spending for new homes. D. changes in inventories.
Refer to the below graph. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively:
A. Inelastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
B. Elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
C. Elastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G)
D. Inelastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G)