If Sellers Respond Substantially to Changes in the Price, Then

question 151

Multiple Choice

If sellers respond substantially to changes in the price, then:

• A)sellers are considered to be relatively price sensitive
• B)sellers are considered to be relatively price insensitive
• C)the supply curve will shift substantially when the price rises
• D)the price elasticity of supply equals one

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Definitions:

Equity Securities

Financial instruments that represent ownership in a company or an entitlement to a share in its profits.

Cost Method

An accounting approach used to measure the value of an investment, where the investment's cost includes the purchase price and any costs of acquisition.

Trading Securities

These are securities that a company holds for the purpose of selling them in the near term to profit from price variations, reported at fair value.

Comprehensive Income

The change in equity of a business enterprise during a period from transactions and other events from non-owner sources, including all revenues, gains, expenses, and losses.