If Price Elasticity of Supply Is Greater Than 1, It

question 14

Multiple Choice

If price elasticity of supply is greater than 1, it means that the percentage change in quantity supplied is

• A)less than the percentage change in price.
• B)greater than the absolute change in price.
• C)greater than the percentage change in price.
• D)equal to the absolute change in price.

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Definitions:

Compounded Annually

This refers to the process of calculating interest on an investment or loan on a yearly basis, where interest from one year is added to the principal for calculation of interest in the next year.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Compounded Quarterly

The process of calculating interest on both the initial principal and the accumulated interest of previous periods on a quarterly basis.

Compound Interest

The interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.