What Is Measured by the Price Elasticity of Supply

question 145

Multiple Choice

What is measured by the price elasticity of supply?

• A) The price elasticity of supply measures how responsive producers are to changes in the price of other goods.
• B) The price elasticity of supply measures how responsive producers are to changes in income.
• C) The price elasticity of supply measures how responsive producers are to changes in the price of a product.
• D) The price elasticity of supply is a measure of the slope of the supply curve.
• E) The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product.

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Definitions:

Supernormal Dividend

Dividends that are higher than the level that can be sustained by the long-term growth rate of the company.

Common Stock

Equity ownership in a corporation, with voting rights and potentially variable dividends.

Sinking Fund Provisions

A requirement that a borrower regularly set aside funds to repay a debt before or at maturity, often used in conjunction with bonds.

Bond Indenture

The formal agreement between a bond issuer and bondholders, detailing the terms of the bond such as interest rates, maturity date, and other conditions.