If the Price Elasticity of Supply Is Equal to 1

question 314

Multiple Choice

If the price elasticity of supply is equal to 1, we would say the supply of the item is

• A) unit elastic.
• B) inelastic.
• C) elastic.
• D) perfectly elastic.

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Definitions:

Reservation Price

The maximum price a buyer is willing to pay for a good or the minimum price a seller is willing to accept.

Good 1

A theoretical or specific item in economics used to model transactions, market behavior, or consumer choice.

Reservation Price

The highest price a consumer is willing to pay for a good or service, beyond which they would choose not to make a purchase.

Barbie's Preferences

A hypothetical concept referring to the assumed tastes or choices that the iconic doll character "Barbie" might have, based on her lifestyle and marketed products.