A Value of Zero for the Elasticity of Supply of Some

question 126

Multiple Choice

A value of zero for the elasticity of supply of some product implies that

• A)the supply curve is horizontal.
• B)supply is highly responsive to price.
• C)the supply curve is vertical.
• D)the product will not be supplied at any price.
• E)there is no supply.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflective of its sensitivity to price changes.

Price Elasticity

An indicator of consumer sensitivity to price fluctuations, represented by the extent to which demand for a product varies in response to its price adjustments.

Pay-As-You-Go Principle

A financing method where expenditures are not financed by borrowing but from current revenues.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, banking supervision, and financial services.