Suppose That Two Supply Curves Pass Through the Same Point

question 64

Multiple Choice

Suppose that two supply curves pass through the same point.One is steep,and the other is flat.Which of the following statements is correct?

• A)The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve.
• B)The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve.
• C)Given two prices with which to calculate the price elasticity of supply,that elasticity would be the same for both curves.
• D)A decrease in demand will increase total revenue if the steeper supply curve is relevant,while a decrease in demand will decrease total revenue if the flatter supply cure is relevant.

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Definitions:

Direct Materials

Primary components used in the manufacturing of products, which are directly traceable to the finished product.

Electricity

A form of energy resulting from the existence of charged particles, widely used for lighting, power, and other applications.

Assembly Worker

An individual employed in the manufacturing sector tasked with putting together components of products on an assembly line.

Variable Cost Per Unit

The cost that varies with each unit produced or sold, not including fixed costs.