If the Price of Good Y Falls from $10 to $8

question 109

Multiple Choice

If the price of Good Y falls from $10 to $8, and the quantity supplied of Good Y falls from 1,000 units to 600 units, the price elasticity of supply is:

• A) 2.67.
• B) -2.67.
• C) 2.25.
• D) -2.25.

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Definitions:

Least-Cost Combination

is an economic principle that firms achieve by using the mix of inputs that minimize their costs while producing a given level of output.

MRP

Marginal Revenue Product; the additional revenue generated by employing one more unit of a resource or factor of production.

Resources

Assets, materials, and inputs needed for the production of goods and services, including natural resources, labor, and capital.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogenous products, and the absence of barriers to entry or exit, leading to optimal pricing and output.