The Supply of Product X Is Elastic If the Price

question 191

Multiple Choice

The supply of product X is elastic if the price of X rises by

• A)5 percent and quantity supplied rises by 7 percent.
• B)8 percent and quantity supplied rises by 8 percent.
• C)10 percent and quantity supplied remains the same.
• D)7 percent and quantity supplied rises by 5 percent.

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Definitions:

Payback Period

This is the duration required to recoup the funds expended in an investment.

Simple Rate Of Return

The rate of return computed by dividing a project’s annual incremental net operating income by the initial investment required.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation each year over the asset's useful life.

Working Capital

The gap between a firm's current assets and its current liabilities, reflecting its short-term financial stability.