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

question 67

Multiple Choice

If, for a given percentage increase in price, quantity supplied increases by a proportionately larger percentage, then supply is

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

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Definitions:

Efficient Level

The optimal point of operation where resources are used in such a way that maximizes productivity and minimizes waste.

Negative Externality

A cost that is suffered by a third party due to an economic transaction, where the cost is not reflected in the transaction's final price.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good, including both direct costs to the producer and external costs to others.

Efficient Output

The level of production at which a company or economy can produce the maximum amount of goods at the lowest cost.