Which Elasticity Measures Producers' Responsiveness to a Change in Price

question 25

Multiple Choice

Which elasticity measures producers' responsiveness to a change in price?

• A) Price elasticity of demand
• B) Cross-price elasticity
• C) Price elasticity of supply
• D) Income elasticity of supply

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Definitions:

Minimum Rate

The lowest acceptable rate of return on an investment, often used in the evaluation of projects or financial decisions.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.

Cash Inflows

The total amount of money being transferred into a business, typically from operating, investing, and financing activities.