If the Price Elasticity of Supply for a Window Manufacturer

question 82

Multiple Choice

If the price elasticity of supply for a window manufacturer is 1.5,

• A)a 10% increase in the price of windows results in a 15% increase in the quantity of windows supplied.
• B)supply is considered to be inelastic.
• C)the manufacturer is likely operating very near capacity.
• D)All of the above are correct.

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Definitions:

Discounting

A financial strategy that adjusts the future value of cash flows to their present value, often for analysis or investment decisions.

Actual Interest Rate

The real rate of interest earned or paid on an investment or loan, taking into account the effect of compounding and all fees and charges.

Non-Interest-Bearing

Refers to financial instruments or accounts that do not yield interest over time, such as some checking accounts.

Discounted

The practice of reducing the selling price of goods or services, often to encourage sales.