The Elasticity of Supply of Product X Is Unitary If

question 184

Multiple Choice

The elasticity of supply of product X is unitary if the price of X rises by

• A)4 percent and quantity supplied rises by 6 percent.
• B)7 percent and quantity supplied rises by 7 percent.
• C)12 percent and quantity supplied stays the same.
• D)5 percent and quantity supplied rises by 2 percent.

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Definitions:

Equilibrium Price

The selling price where the amount of products offered is equal to the amount of products consumers want to buy.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a particular price over a specified period.

Quantity Demanded

Denotes the overall quantity of a product or service that buyers are ready and capable of buying at a certain price point during a specified timeframe.

Shortage

A situation where the demand for a product exceeds the supply available at a specific price.