The Price Elasticity of Supply for Umbrellas Is 2

question 104

Multiple Choice

The price elasticity of supply for umbrellas is 2.Suppose you are told that following a price increase, quantity supplied increased by 30 per cent.What was the percentage change in price that brought this about?

• A)60 per cent
• B)15 per cent
• C)6)7 per cent
• D)impossible to determine without additional information

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Definitions:

Rent-Seeking

Actions by individuals and groups designed to restructure public policy in a manner that will either directly or indirectly redistribute more income to themselves or the projects they promote.

Monopoly Power

The ability of a single seller or company to control the market price and supply of a product or service.

High-priced Rental

Property rental arrangements that are significantly more expensive than the average market rate.

Rent-seeking

Endeavors aimed at earning income by manipulating the economic environment rather than through trade and production of added value.