What Is Price Elasticity of Supply

question 132

Multiple Choice

What is price elasticity of supply?

• A) It is the percentage change in the quantity supplied of a good or service divided by the percentage change in the price of the good or service.
• B) It is a measure of consumers' responsiveness to a change in price.
• C) It is the absolute value of the quantity supplied of a good or service and is always a negative number.
• D) It is the percentage change in the price of a good or service divided by the percentage change in the quantity supplied of the good or service.

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Definitions:

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Time Value

A financial principle acknowledging that receiving money now is more advantageous than receiving the same amount in the future due to its earning potential.

Payback Method

A capital budgeting technique that calculates the time required to recoup the initial investment through cash inflows.

Accounting Rate

Often refers to the accounting rate of return (ARR), a financial ratio used to measure the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.