The Price Elasticity of Supply Is a Unit-Free Measure and Uses

question 121

True/False

The price elasticity of supply is a unit-free measure and uses percentage changes in quantity supplied and price to measure how sensitive supply is to a change in price.

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Definitions:

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick assets (cash, marketable securities, and receivables).

Working Capital

Current assets less current liabilities.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.

Acid-Test Ratio

A financial ratio indicating a firm's capacity to settle short-term debts without having to sell its stock.