At a Price of $4, Quantity Supplied Is 120, and at a Price

question 91

Multiple Choice

At a price of $4, quantity supplied is 120, and at a price of $10, quantity supplied is 300. Using the midpoint formula, the price elasticity of supply is ________ and supply is ________.

• A) 0.1; inelastic
• B) 0.40; inelastic
• C) 2.5; elastic
• D) 1; unit elastic

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Definitions:

Retained Earnings

The portion of net profits not distributed as dividends but retained by the company to be reinvested in its core business or to pay debt.

Acquisition Differential

The difference between the purchase price of an acquired company and the net value of its identifiable assets and liabilities.

Equity Method

An accounting approach where an investor's share of investee profits or losses is reported in the investor's financial statements.

Acquisition Differential

The difference between the cost of acquiring an entity and the sum of the fair value of identifiable net assets acquired.