(Figure) the Figure Shows Two Supply Curves for Two Different

question 68

Multiple Choice

(Figure) The figure shows two supply curves for two different periods for the same product. If the price of the product increased from $20 to $25, the price elasticity of supply will be _____ in the short run and _____ in the long run using the midpoint method.

• A) 1; 1.8
• B) 0.56; 1
• C) 1.8; 1.5
• D) 1; 1.67

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service, a critical concept in economics and decision making in business.

Average Total Cost

The total cost divided by the number of goods or services produced, indicating the average expense per unit.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or output.

Output Level

The quantity of goods or services produced within a given period by a business or economy.