The Price Elasticity of Supply for a Good Is 3

question 185

Multiple Choice

The price elasticity of supply for a good is 3 if:

• A) a 1 percent increase in price leads to a 3 percent decrease in quantity supplied.
• B) a 1 percent decrease in price leads to a 3 percent decrease in quantity supplied.
• C) a 9 percent decrease in price leads to a 3 percent decrease in quantity supplied.
• D) None of the above are true.

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Definitions:

Conditioning

A psychological process through which an individual learns to associate a specific behavior with a particular stimulus, leading to an increase or decrease in that behavior.

Expectations

Beliefs or predictions about future events or behaviors that can influence one's perceptions and actions.

Psychoanalytic

A psychological perspective focusing on unconscious processes and conflict within an individual.