The Following Graph Shows the Supply Curve of a Product

question 31

Multiple Choice

The following graph shows the supply curve of a product.What is the arc price elasticity of supply of this product when its price changes from $12 to $8?

• A) 1
• B) 1.25
• C) 0.50
• D) 0.75

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Definitions:

Accounting Rate of Return

A measure of the return expected on an investment, calculated by dividing the average annual profit by the initial investment cost.

After-Tax Net Income

The amount of profit a company remains with after all tax expenses have been deducted from its total income.

Accounting Rate of Return

A financial metric used to assess the profitability of an investment, calculated as the average annual return over the investment's life divided by the initial investment cost.

Straight-Line Depreciation

An arrangement for apportioning the financial burden of a physical investment throughout its active life in equal yearly disbursements.