If the Elasticity of Supply of a Good Was 2

question 106

Multiple Choice

If the elasticity of supply of a good was 2, how much would the price have to increase to lead to an increase in output of 6 percent?

• A)​3 percent.
• B)​4 percent.
• C)​8 percent.
• D)​12 percent.

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Definitions:

NPV

Net Present Value (NPV) is a method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows.

CCA Class

A grouping within the Canadian Capital Cost Allowance system used for categorizing depreciable assets for tax purposes.

After-tax Operating Income

The profit a company generates from its core business operations after taxes have been subtracted, excluding non-operating income and expenses.

Equivalent Annual Cost

A financial analysis method used to compare the cost-effectiveness of different investments with unequal lifespans by converting their costs into an annualized format.