If Supply Is P = 20 + 10Q and P

question 32

Multiple Choice

If supply is P = 20 + 10Q and P = $22,the price elasticity of supply is

• A) 22.
• B) 11.
• C) 1.1.
• D) 0.11.
• E) 0.011.

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Definitions:

Fixed Costs

Costs that do not change with the level of output or sales within a certain period of time.

Break-Even Point

The production level or sales volume at which total revenues equal total expenses, resulting in zero profit or loss.

Warehouse Rent

The cost incurred for storing goods in a warehouse.

Mixed Cost

An expense that contains both fixed and variable cost elements, changing in total with increases or decreases in production or sales volume.