If Supply Is Highly Inelastic and Demand Shifts to the Right

question 137

Multiple Choice

If supply is highly inelastic and demand shifts to the right:

• A) price probably will rise significantly; quantity hardly changes at all.
• B) price will hardly change at all; quantity will rise significantly.
• C) price will rise significantly as will quantity.
• D) price and quantity will hardly change at all.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating the basic profitability of a company's core operations.

Gross Profit

The difference between sales and the cost of goods sold, essentially measuring the efficiency of a company in managing its labor and supplies in production.

Intra-entity

Pertains to transactions or activities occurring within the same legal entity.

Equity Method

An accounting technique used by a company to record its investment in another company based on the profit or loss and changes in the investee’s equity.