The Price Elasticity of Supply for a Good Is 3

question 185

Multiple Choice

The price elasticity of supply for a good is 3 if:

• A) a 1 percent increase in price leads to a 3 percent decrease in quantity supplied.
• B) a 1 percent decrease in price leads to a 3 percent decrease in quantity supplied.
• C) a 9 percent decrease in price leads to a 3 percent decrease in quantity supplied.
• D) None of the above are true.

---

Definitions:

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.

Significant Influence

The power to participate in the financial and operating policy decisions of a business, without having control over those policies.

Policy-Making Decisions

The process involving the development and implementation of strategies and guidelines to govern the actions and future direction of an entity.

Voting Power

The total number of votes that can be cast in decision-making processes within a corporation, often directly linked to the amount of shares held.