If the Elasticity of Supply Is 2

question 189

Multiple Choice

If the elasticity of supply is 2.0, what happens to quantity supplied following a 7 percent increase in price? Quantity supplied increases:

• A) 3.5 percent.
• B) 2.9 percent.
• C) 14 percent.
• D) 9 percent.

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Definitions:

Purchase Spend

Purchase spend refers to the total amount of money a company expends on acquiring goods and services necessary for its operations.

Price Negotiations

entail bargaining between buyers and sellers to reach mutually agreeable terms for the price of goods or services.

Supply Management

The process of managing the acquisition of goods and services for an organization, focusing on optimizing cost, quality, and delivery.

Decrease Costs

The process or strategy of reducing the amount of money required for operations, production, or other activities within an organization.