Suppose that the price elasticity of supply is 1.25 and the quantity supplied increases by 10%. Other things being equal, the percentage change in the price should be:
A. a 0.8% increase in the price.
B. an 8% increase in the price.
C. a 1.25% increase in the price.
D. a 12.5% increase in the price.
Answer: B
You might also like to view...
A perfectly competitive market arises when
A) the market demand is small relative to the output of a firm. B) there are many buyers but few sellers. C) the market demand is very large relative to the output of one seller. D) a firm has control over a unique resource. E) each of the many firms produces a slightly different product.
A certain machine will last one year, will produce $120 in income (received one year later), and will cost $100 . The lowest interest rate at which this investment will be unprofitable is
a. 10 percent. b. 11 percent. c. 19 percent. d. 22 percent.
Which of the following is an exogenous variable in the Three-Sector-Model?
a. Credit risk b. Country risk c. Expected inflation d. Industry risk e. Real risk-free interest rate
Figure 5-4
Refer to . The figure illustrates an industry that generates
a.
external benefits.
b.
external costs.
c.
no externalities.
d.
economies of scale.