If the Price Elasticity of Supply Is 0

question 74

Multiple Choice

If the price elasticity of supply is 0.4,and a price increase led to a 5% increase in quantity supplied,then the price increase is about

• A)0.25%.
• B)1.2%.
• C)2%.
• D)12.5%.

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Definitions:

Project

A planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Selling Price

The amount of money for which a product or service is sold to the customer.

Principal

An individual or entity that authorizes an agent to act on their behalf in legal or financial matters.

NPV Criterion

A financial metric used to assess the profitability of an investment, calculating the net present value of all cash flows associated with it.