Which of the Following Statements Regarding Price Elasticity of Supply

question 37

Multiple Choice

Which of the following statements regarding price elasticity of supply and the length of time for adjustment is FALSE?

• A) The longer is the time period for adjustment, the greater is the price elasticity of supply.
• B) The longer is the time period for adjustment, the less is the extent to which resources flow into (or out of) an industry through expansion (or contraction) of existing firms.
• C) The longer is the time period for adjustment, the greater is the extent to which entry or (exit) of firms increases or (decreases) production in an industry.
• D) The shorter the time period for adjustment, the greater is the price elasticity of supply.

---

Definitions:

Portfolio Beta

A gauge for the level of risk and volatility in a portfolio versus the broader market.

Diversified Portfolio

An investment strategy that aims to reduce risk by allocating investments among various financial instruments, industries, and other categories.

Standard Deviation

A statistical measure of the dispersion or variability of a set of values around the mean.

Unanticipated Rate

A rate of change in prices or interest that market participants did not expect, often influencing investment decisions and economic forecasts.