Suppose the Price Elasticity of Supply for Cheese Is 0

question 16

Multiple Choice

Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run.If an increase in the demand for cheese causes the price of cheese to increase by 15%,then the quantity supplied of cheese will increase by

• A)0.4% in the short run and 4.6% in the long run.
• B)1.7% in the short run and 0.7% in the long run.
• C)9% in the short run and 21% in the long run.
• D)25% in the short run and 10.7% in the long run.

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Definitions:

Negatively

In a manner that expresses or implies the presence of harmful, undesirable, or adverse effects.

Quality

The degree to which a set of inherent characteristics fulfills requirements.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of shareholders in the company.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate revenue.