At a Price of $1

question 239

Multiple Choice

At a price of $1.20,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.40,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is

• A) 0.15
• B) 0.375
• C) 2.5
• D) 2.60

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Definitions:

Variable Cost

Expenses that fluctuate in direct proportion to the production or sales volume, including the costs of raw materials and direct labor.

Outside Supplier

A company or entity that provides goods or services to another company but is not part of that company's corporate structure.

Packing And Shipping Costs

Expenses associated with preparing and sending goods to customers, including materials for packing and freight charges.

Parts

Components or materials used in the manufacturing or assembly of a product, often inventoried and managed as part of the supply chain process.