If a 20 Percent Increase in the Price of a Good

question 250

Multiple Choice

If a 20 percent increase in the price of a good does not change the quantity supplied,the

• A) supply is perfectly inelastic.
• B) supply is unit elastic.
• C) supply is perfectly elastic.
• D) supply is elastic.
• E) None of the above answers is correct.

Describe the relationship between marginal cost, average total cost, and average variable cost.

Understand the impact of changes in fixed costs on average fixed costs and total costs.

Interpret production and cost diagrams to identify cost components and their implications on production decisions.

Relate the concepts of marginal product and marginal cost to the efficiency of production inputs.

---

Definitions:

Price Falls

A decrease in the cost of goods or services in the market.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price, with high elasticity indicating a significant response to price changes.

Sensitivity of Quantity

The responsiveness of the quantity demanded or supplied of a product to changes in its price or other factors.

Sensitivity of Price

The degree to which the price of a product or service impacts consumer demand or the quantity supplied.