Suppose That After a Five Per Cent Increase in the Price

question 147

Multiple Choice

Suppose that after a five per cent increase in the price of timber, a forestry company increases its supply of timber by 10 per cent in the next three months, and 15 per cent by 12 months.This means that the elasticity of supply is _____.

• A)3 at three months and 2 at 12 months
• B)0.5 at three months and 0.3 at 12 months
• C)2 at three months and 3 at 12 months
• D)0.3 at three months and 0.5 at 12 months

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Definitions:

Differentiation Value

The unique attributes or benefits that make a product or service stand out from competitors, enhancing its market appeal.

Useful Life

The estimated period over which a fixed asset is expected to be usable by the organization, impacting its depreciation calculation.

Operating Costs

The ongoing expenses related to running a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

Service Hours

The total hours spent by an organization or employee providing services to clients or working on service-related tasks.