Suppose There Is an Increase in the Cost of Resources

question 13

Multiple Choice

Suppose there is an increase in the cost of resources used in the production of good A.Then

• A)if the price of A rises,the demand for A is elastic.
• B)if the total revenue from sales of A increases,the demand for A is elastic.
• C)if the total revenue from sales of A decreases,the demand for A is elastic.
• D)total revenue increases because the price of A rises.
• E)total revenue decreases because the quantity bought and sold of A decreases.

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Definitions:

Spread

The difference between two prices, rates, or yields, often measuring the gap between bid and ask prices or between interest rates.

Commitment

A pledge or obligation to do something, often used in the context of agreements or contracts.

Standby Underwriting

A type of underwriting where the underwriter agrees to buy any remaining shares not sold in a public offering, ensuring the issuing company sells all shares.