If Two Supply Curves Pass Through the Same Point and One

question 303

Multiple Choice

If two supply curves pass through the same point and one is steep and the other is flat,which of the following statements is correct?

• A) The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve.
• B) The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve.
• C) Given two prices with which to calculate the price elasticity of supply,that elasticity is the same for both curves.
• D) A decrease in demand will increase total revenue if the steeper supply curve is relevant,while a decrease in demand will decrease total revenue if the flatter supply cure is relevant.

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Definitions:

Floatation Costs

Expenses incurred by a company during the process of issuing new securities, including legal, accounting, and underwriting fees.

Common Stock

Common Stock is a type of equity ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Dividend Growth

The increase in the amount of the dividend payments issued by a company over time, indicating the company's growth and stability.

Dividend Growth

The rate at which a company's dividend payments to shareholders increase over time, indicating potential profitability and stability.