The Quantity Supplied of Bagels Is 100 at the Unit

question 20

Multiple Choice

The quantity supplied of bagels is 100 at the unit price $1. Suppose the price elasticity of supply by the initial value method is 1.5, and you would like to induce sellers to increase the quantity of bagels supplied to 130. Then the new price for bagels must be

• A) $11.
• B) $10.20.
• C) $1.20.
• D) $1.10.

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Definitions:

Marginal Cost

The expense increase associated with creating an additional unit of a product or service.

Mix of Output

The combination or range of different goods or services produced by an economy or firm, reflecting its production choices and strategy.

Market Failure

A circumstance where the distribution of goods and services through an unregulated market fails to be efficient, frequently resulting in a decrease in overall social welfare.

Externalities

Expenses or advantages impacting individuals who did not decide to bear those expenses or advantages.