The Elasticity of Supply Measures

question 82

Multiple Choice

The elasticity of supply measures:

• A) the percent change in quantity demanded divided by the percent change in price.
• B) the percent change in quantity supplied.
• C) the percent change in price.
• D) how responsive the quantity supplied is to a change in price.

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Definitions:

Profit-Maximizing

A strategy where a firm determines the price and production level that generates the highest possible profit.

MRP

The additional revenue a firm gains from hiring an additional unit of input, such as labor, in the production of goods.

MRC

Marginal Revenue Cost, NO.

Pure Competition

A market structure in which a very large number of firms sells a standardized product, into which entry is very easy, in which the individual seller has no control over the product price, and in which there is no nonprice competition; a market characterized by a very large number of buyers and sellers.