The Price Elasticity of Supply Measures How Responsive

question 14

Multiple Choice

The price elasticity of supply measures how responsive

• A)sellers are to a change in price.
• B)sellers are to a change in buyers' income.
• C)buyers are to a change in production costs.
• D)equilibrium price is to a change in supply.

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Definitions:

Purchases Budget

A financial plan that estimates the amount of goods or inventory a business needs to buy over a certain period to meet its sales goals.

Production Budget

An estimation of the total output a company needs to meet its sales goals and inventory policies, expressed in units or monetary terms.

Merchandising Companies

Companies that purchase goods in finished form for resale to consumers, generating revenue primarily from the sale of merchandise.

Direct Materials Budget

A financial plan that estimates the quantity and cost of direct materials needed to meet production requirements.