If a 10 Percent Increase in Price Causes a 5

question 166

Multiple Choice

If a 10 percent increase in price causes a 5 percent increase in quantity supplied, then supply is

• A) elastic.
• B) inelastic.
• C) unit elastic.
• D) infinite.

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Definitions:

Long-Run Industry Supply Curve

The long-run industry supply curve shows how the quantity supplied by an industry varies with price once all adjustment has been made, including the entry and exit of firms.

Increasing-Cost Industry

An industry in which production costs rise as firms enter the market, often leading to higher prices for consumers.

Positive Profits

Financial gains achieved when the total revenues exceed the total costs of a business.

Long-Run

In economics, the Long-Run is a period during which all input factors of production and costs are variable, allowing for the adjustment of all possible variables.