If Demand Is Highly Inelastic and Supply Shifts to the Right

question 63

True/False

If demand is highly inelastic and supply shifts to the right, the equilibrium price will rise significantly while quantity will increase only slightly.

---

Definitions:

Acid-test Ratio

A financial metric that assesses a company's ability to quickly liquidate assets to cover short-term liabilities, excluding inventory.

Debt-to-equity Ratio

A financial measure that reflects the balance of debt and equity used in funding a company's assets.

Receivable Turnover

A financial metric that measures how many times a company can turn its accounts receivable into cash during a period.

Inventory Turnover

A financial metric that measures how many times a company has sold and replaced its inventory over a certain period of time.