If Sellers Do Not Adjust Their Quantity Supplied at All

question 81

Multiple Choice

If sellers do not adjust their quantity supplied at all in response to a change in price,the price elasticity of supply is

• A)zero,and the supply curve is horizontal.
• B)zero,and the supply curve is vertical.
• C)infinity,and the supply curve is horizontal.
• D)infinity,and the supply curve is vertical.

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Definitions:

Future Value

Value of cash flows at a future date, taking into account interest accumulated between when the cash flow occurred and the future date.

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset’s book value declines compared to straight-line depreciation.

Straight-Line Depreciation

A method of allocating the cost of an asset evenly over its useful life.

Depreciation Tax Shield

The reduction in taxes due to depreciation’s reducing taxable income.