A Price Elasticity of Supply of 1

question 114

Multiple Choice

A price elasticity of supply of 1.5 implies that

• A)a 20 percent increase in the quantity supplied increases the price by 30 percent.
• B)total revenue is 1.5 times total cost.
• C)a 20 percent increase in the price increases the quantity supplied by 30 percent.
• D)a 20-unit increase in supply reduces the price by $30.
• E)a $20 increase in the price increases the quantity supplied by 30 units.

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Definitions:

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