The Elasticity of Supply Measures

question 204

Multiple Choice

The elasticity of supply measures:

• A) how quickly a surplus is eliminated.
• B) how quantity supplied responds to price changes.
• C) the profit margin of sellers' products.
• D) the costs of changing production methods.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and the higher price they actually receive, representing the benefit to producers.

Tax

A tax represents an obligatory monetary fee or different kind of charge applied to a taxpayer by a government entity, intended to finance government operations and a range of public spending.

Sellers Receive

Refers to the revenue or payment that sellers get in exchange for providing goods or services in a market.