Asked by Susana Contreras on Jul 28, 2024
Verified
There is NO total revenue test for price elasticity of supply because:
A) price and quantity supplied are usually inversely related.
B) price and quantity supplied are usually positively related.
C) total revenue will not usually change in the direction of a supply price change.
D) price and quantity supplied are always negatively related.
Price Elasticity of Supply
A measure of how much the quantity supplied of a good responds to a change in the price of that good, symbolized as a percentage change.
Total Revenue Test
A method used to assess the elasticity of demand by observing changes in total revenue following a price change.
Quantity Supplied
The actual amount of a good or service producers are willing to sell at some specific price.
- Understand the concept of price elasticity of supply.
Verified Answer
AM
Alissa Mullins-DiazJul 29, 2024
Final Answer :
B
Explanation :
Price and quantity supplied are usually positively related, meaning that as the price increases, the quantity supplied also increases, and vice versa. This positive relationship is a fundamental principle of supply in economics, contrasting with the concept of price elasticity of demand, where price and quantity demanded are inversely related.
Learning Objectives
- Understand the concept of price elasticity of supply.