All Things Equal, the Price Elasticity of Supply

question 56

Multiple Choice

All things equal, the price elasticity of supply

• A) will be smaller in the short run than in the long run.
• B) will be smaller in the long run than in the short run.
• C) is the same for the short run and the long run.
• D) approaches zero in the long run.

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Definitions:

FIFO Method

A method of inventory valuation where the first items produced or purchased are the first ones to be expended or sold.

Equivalent Units

Units of production expressed in terms of fully completed units; a concept used in manufacturing to measure output in a period that factors in incomplete units.

Material

The substance or substances from which something is made or can be made, often used in reference to supplies used in manufacturing.

Conversion Costs

Costs incurred to convert raw materials into finished products, typically including labor and overhead expenses.