Use the figure below, and the regular percentage change formula, to answer the following question: 
Assume that price decreases from $10 to $2. The price elasticity of supply is about
A. 0.35 and supply is inelastic.
B. 1 and supply is unit-elastic
C. 4 and supply is elastic.
D. 1.25 and supply is elastic.
Answer: A
You might also like to view...
The Federal Open Market Committee is
A) the main policy-making body of the Fed. B) a seven-member board, each serving a 14-year term. C) comprised of the presidents of the 12 Federal Reserve Banks. D) another name for the Board of Governors. E) the government committee charged with determining income tax rates.
Suppose some members of Enron's board of directors are aware of the company's true financial condition, information that is not available to most investors. This is an example of
A) lemon problem. B) moral hazard. C) adverse selection. D) asymmetric information.
In terms of exports from the colonies, ______ and ______ were the top two trading partners
a. the United Kingdom; Africa b. Southern Europe; the West Indies c. the West Indies; the United Kingdom d. the United kingdom; Southern Europe.
Inefficient use of resources leads to:
a. production bundles inside the production set. b. production bundles outside the production set. c. a reduction in the production set. d. production of a combination on the production set.