If a 5 Per Cent Increase in the Price Results

question 128

Multiple Choice

If a 5 per cent increase in the price results in a 9 per cent increase in quantity supplied, the elasticity of supply is

• A) 1.20.
• B) 0.30.
• C) 0.55.
• D) 1.80.

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Definitions:

Cyclical Dividend Policy

A dividend payment strategy by companies that varies depending on the economic cycle, with higher payouts during economic prosperity and lower or no dividends during downturns.

Economic Growth

An increase in the production and consumption of goods and services, indicating a country's economic health.

Manufacturing Firm

A business that produces goods through the use of labor, machines, tools, and chemical or biological processing or formulation.

Reverse Stock Split

A corporate action in which a company reduces the number of its outstanding shares to increase the share price, without changing the company's overall market capitalization.