A Key Determinant of the Price Elasticity of Supply Is

question 26

Multiple Choice

A key determinant of the price elasticity of supply is the time period under consideration.Which of the following statements best explains this fact?

• A)Supply curves are steeper over long periods of time than over short periods of time.
• B)Buyers of goods tend to be more responsive to price changes over long periods of time than over short periods of time.
• C)The number of firms in a market tends to be more variable over long periods of time than over short periods of time.
• D)Firms prefer to change their prices in the short run rather than in the long run.

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Definitions:

Developing Countries

Nations with a lower living standard, undeveloped industrial base, and low Human Development Index relative to other countries.

Stock Exchanges

Marketplaces where stocks (shares of ownership in businesses) are bought and sold by investors.

Open Auctions

A market mechanism in which prices are determined through bids and offers made openly by participants, often in real-time.

Investment Bankers

Assist companies in raising capital and provide merger and acquisition services.