If the Price Elasticity of Supply Is 1

question 9

Multiple Choice

If the price elasticity of supply is 1.5,and a price increase led to a 1.8% increase in quantity supplied,then the price increase is about

• A)0.67%.
• B)0.83%.
• C)1.20%.
• D)2.70%.

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Definitions:

Social Benefits

The aggregate advantage to society derived from the production or consumption of a product, encompassing both individual benefits and any additional external advantages.

Pay-per-view Movies

A service that allows consumers to pay for individual movies to watch rather than subscribing to a broad service offering.

Common Resource

A resource like air or water that is available to all but can be depleted by overuse.

Nonrival

A characteristic of a good or service indicating that one person's consumption does not diminish the availability of that good for consumption by others.