If the Quantity Supplied of a Product Stays the Same

question 72

Multiple Choice

If the quantity supplied of a product stays the same no matter what its price, then the elasticity of supply of the product is

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

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of output or the level of business operations, including expenses like rent, wages, and insurance fees.

Rent Expense

The cost incurred from renting property or equipment for business or personal use, recognized as an expense on the income statement.

Margin of Safety

The difference between actual sales and the break-even point, used as a buffer against unpredictability in business performance.

Break-Even Point

The point at which total costs equal total revenue, meaning a business neither makes a profit nor incurs a loss.