If the Estimated Elasticity of Supply Coefficient Equals 0

question 113

Multiple Choice

If the estimated elasticity of supply coefficient equals 0.85, then:

• A)​the supply curve is vertical.
• B)​the demand curve is horizontal.
• C)​supply is unit elastic.
• D)​supply is relatively inelastic.

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Definitions:

Contribution Margin Ratio

A financial metric that represents the percentage of sale price that remains after variable costs are subtracted.

Sales Dollars

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Margin of Safety

The difference between actual or expected sales and the sales volume at which a company breaks even.

Fixed Costs

Rephrased: Expenses that remain constant regardless of the amount of goods or services produced by a business.