If an Increase in Price from $1

question 88

Multiple Choice

If an increase in price from $1.20 to $2 per unit leads to an increase in quantity supplied from 20 to 100 units,then _____

• A)supply is perfectly elastic.
• B)supply is perfectly inelastic.
• C)supply is unit elastic.
• D)supply is elastic.
• E)supply is inelastic.

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Definitions:

Operating Capacity

The maximum level of activity that a company can sustain with its current resources and infrastructure without incurring additional costs.

Investment Center

A business unit or department that is responsible for its own revenues, expenses, and investment in assets, with its performance measured by its return on investment.

Controllable Margin

The portion of profit or income directly influenced by the management decisions, typically excluding fixed costs.

Required Return

The minimum expected return by investors for providing capital, based on the risk of the investment.