When Supply Is Perfectly Elastic,the Value of the Price Elasticity

question 18

Multiple Choice

When supply is perfectly elastic,the value of the price elasticity of supply is

• A)0.
• B)1.
• C)greater than 0 and less than 1.
• D)infinity.

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Definitions:

Future Shop

A now-defunct Canadian electronics retailer that was absorbed by Best Buy.

Normal Retail Price

The standard selling price of a good or service in the retail market before any discounts or promotions are applied.

Computers

Electronic devices that execute specific tasks based on programmed instructions, capable of processing, storing, and retrieving data.

Break-even Price

The price level at which revenues equal costs, resulting in neither profit nor loss.