In Each of the Following Cases,do You Think the Price

question 134

Short Answer

In each of the following cases,do you think the price elasticity of supply is (i) perfectly elastic; (ii) perfectly inelastic; (iii) elastic,but not perfectly elastic; or (iv) inelastic,but not perfectly inelastic
a.An a series of severe winter storm warnings leads to a huge jump in the sales price of power generators.
b.The price of a kilowatt of electricity is the same during periods of high electricity demand as during periods of low electricity demand.
c.Fewer people want to fly during November than during any other month.The airlines cancel about 10 percent of their flights as ticket prices fall about 20 percent during this month.
d.Owners of vacation homes in Sandbanks rent them out during the summer.Due to the soft economy this year,a 30 percent decline in the price of a vacation rental leads more than half of homeowners to occupy their vacation homes themselves during the summer.

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Definitions:

Prospective Franchisees

Individuals or entities considering and evaluating the opportunity to operate a branch of a franchise.

Anticompetitive Agreements

Contracts or collaborations between businesses that restrict competition in the marketplace, often considered illegal under antitrust laws.

Freedom of Contract

The principle that individuals have the liberty to create, define, and enforce agreements without undue government interference.

Projected Earnings Figures

Financial estimates predicting a company's future profitability over a specific period of time.