If Supply Is Perfectly Inelastic, the Price Elasticity of Supply

question 113

Multiple Choice

If supply is perfectly inelastic, the price elasticity of supply is equal to

• A) 1.
• B) 0.
• C) infinity.
• D) a negative number between 0 and infinity.

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Definitions:

Finished Goods Inventory

Inventory of finished goods available for sale.

Standard Costs

Predetermined costs used for product costing, budgeting, and measuring performance, usually reflecting ideal expenses under normal conditions.

Work in Process

Goods in various stages of production within a factory, not yet completed but also not raw materials.

Fixed Manufacturing Overhead

The costs associated with production that do not change with the level of output, such as depreciation of equipment and salary of the factory manager.