If, for a Given Percentage Decrease in Price, Quantity Supplied

question 227

Multiple Choice

If, for a given percentage decrease in price, quantity supplied decreases by a proportionately smaller percentage, then supply is

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

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Definitions:

Fifth Worker

An example used in economics to illustrate the principle of diminishing returns, where the addition of a fifth worker may lead to a lesser increment in output than the fourth.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, keeping all others constant.

Bushel of Wheat

A unit of measure for volumes of wheat, commonly used in agriculture, equivalent to approximately 60 pounds in the United States.

Profit-Maximizing Quantity

The level of production at which a firm can achieve the highest possible profit, determined by the intersection of marginal cost and marginal revenue.