If the Price of Cocoa Rises by 20 Percent, the Quantity

question 202

Multiple Choice

If the price of cocoa rises by 20 percent, the quantity supplied of cocoa rises by 4 percent. What is the elasticity of supply?

• A) 5
• B) 2
• C) 0.2
• D) 0.008

---

Definitions:

Opportunity Costs

The price paid for not selecting the next most favorable choice when a decision is made.

Asset Replacement

The process of substituting old assets with new ones to maintain or improve operational efficiency.

Asset Expansion

The process of increasing a company's investment in current and fixed assets to boost its capacity and efficiency.

Pretax Proceeds

The amount of money generated from a sale or transaction before any taxes are deducted.