Which of the Following Statements Is Correct

question 378

Multiple Choice

Which of the following statements is correct?

• A) Supply is more elastic in the short run than in long run.
• B) Supply is more elastic in the long run than in short run.
• C) Price elasticity of supply is constant along the supply curve.
• D) Price elasticity of supply is always a negative number.

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Definitions:

Fixed Costs

Fixed costs refer to the expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Revenue

The total amount of money received by a company from its business activities, such as the sale of goods or services, before any expenses are deducted.

Break-Even Volume

The number of units that must be sold for total revenues to equal total costs, resulting in no profit or loss.

Fixed Costs

Fixed costs are business expenses that remain unchanged regardless of the level of production or sales, such as rent, salaries, and insurance premiums.