If a Small Decrease in the Price of a Good

question 179

Multiple Choice

If a small decrease in the price of a good decreases the quantity supplied to zero,the supply of the good is said to be ________.

• A) unit elastic
• B) inelastic
• C) perfectly inelastic
• D) perfectly elastic

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Definitions:

Profitability Index

A calculation used to assess the desirability of an investment, based on its present value of future cash flows relative to its initial cost.

NPV Profile

A graph that depicts the relationship between a project's net present value (NPV) and various discount rates, helping to assess the project's risk and potential profitability.

Horizontal Axis

The x-axis in a graph or chart, representing a dependent variable in data comparison exercises.

Internal Rate

The Internal Rate of Return (IRR), a measure used to evaluate the profitability of potential investments.