An Increase in the Price of Pure Chocolate Morsels from $2.25

question 246

Multiple Choice

An increase in the price of pure chocolate morsels from $2.25 to $2.45 causes suppliers of chocolate morsels to increase their quantity supplied from 125 bags per minute to 145 bags per minute.Supply is

• A) elastic,and the price elasticity of supply is 1.74.
• B) elastic,and the price elasticity of supply is 0.57.
• C) inelastic,and the price elasticity of supply is 1.74.
• D) inelastic,and the price elasticity of supply is 0.57.

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Definitions:

Least Cost Combination

An economic principle where firms seek to minimize production costs by using the most efficient combination of resources.

Inputs

The resources used in the production process, such as labor, raw materials, and capital equipment.

Output Per Day

The total quantity of goods or services produced by an entity in a single day.

Production Function

An equation or model showing the maximum output that can be produced with a given set of inputs, expressing the relationship between inputs and outputs in the production process.