Scenario 5-3 Suppose That the Supply of Aged Cheddar Cheese Is Inelastic,and

question 38

Multiple Choice

Scenario 5-3
Suppose that the supply of aged cheddar cheese is inelastic,and the supply of bread is elastic.Both goods are considered to be normal goods by a majority of consumers.Suppose that a large income tax increase decreases the demand for both goods by 10%.
-Refer to Scenario 5-3.The price elasticity of supply for aged cheddar cheese could be

• A)-1.
• B)0.
• C)0.5.
• D)1.5.

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A mutual understanding between two or more parties about their respective rights and duties regarding past or future performances.

Offer

An offer is a proposal presented by one party to another with the intention of entering into a binding agreement, subject to acceptance by the receiving party.

Acceptance

In contract law, the expression of assent to the terms of an offer in such a manner that binds both the offeror and the offeree to the terms of the contract.