If the Quantity Supplied of a Good Is Fixed at 100

question 96

Multiple Choice

If the quantity supplied of a good is fixed at 100 units at all price levels, then its price elasticity of supply is

• A)perfectly elastic.
• B)unit elastic.
• C)perfectly inelastic.
• D)zero.
• E)undefined.

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Definitions:

Pigouvian Taxes

Taxes imposed on any market activity that generates negative externalities (costs not reflected in the market price) to correct the market outcome.

External Costs

Costs that are not borne by the producers or users of a product or service, but by society or the environment.

Polluting Firms

Companies that release harmful substances into the environment as a byproduct of their production processes.

Emissions Standards

Emissions standards are government-imposed limits on the amount of pollutants that can be emitted by vehicles and other sources, to protect environmental and public health.