Suppose That Each Serving of Mac & Cheese Costs Exactly

question 118

Multiple Choice

Suppose that each serving of Mac & Cheese costs exactly $0.50 to make no matter how many servings are produced.This means that the price elasticity of supply for Mac & Cheese is ______ and the supply is _______.

• A)one;perfectly inelastic
• B)zero;perfectly elastic
• C)infinity;perfectly inelastic
• D)infinity;perfectly elastic

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Definitions:

Strategic Behavior

Actions taken by firms or individuals with the aim of influencing the market or competitors to achieve a particular outcome or advantage.

Product Differentiation

A strategy that firms use to achieve market power. Accomplished by producing goods that differ from others in the market.

Barriers

Factors or conditions that obstruct entry into a market, restrict competition, or hinder business operations and growth.

Homogeneous Product

A product that is considered the same across different producers, making it indistinguishable in the eyes of the consumer.