IF THE PRICE OF AN ITEM CHANGES BY 8% AND QUANTITY SUPPLIED CHANGES FROM 600 UNITS TO 660 UNITS, THE PRICE ELASTICITY OF SUPPLY IS
A. 0.80 B. 1.25 ✓ C. 2.00 D. 10.00 The answer to the question is: B. 1.25 The price elasticity of supply measures the responsiveness of the quantity supplied of a good to a change in its price. It is calculated as…
IN A PERFECT COMPETITION, THE MARKET PRICE IS DETERMINED BY
A. the government B. the producer C. the consumer D. the market supply and demand junctions ✓ The answer to the question is: D. the market supply and demand junctions In a perfect competition, the market price is determined by the market supply and…
IF QUANTITY SUPPLIED IS CONSTANT IRRESPECTIVE OF PRICE CHANGES, THE SUPPLY ELASTICITY IS
A. unitary B. infinity C. fairly elastic D. perfectly inelastic ✓ The answer to the question is: D. perfectly inelastic If the quantity supplied remains constant regardless of changes in price, the supply elasticity is considered perfectly inelastic. This means that the quantity supplied…
AN INCREASE IN NOMINAL INCOME WITHOUT INCREASE IN PRICE WILL RESULT TO
A. increased real income ✓ B. increased GDP C. decreased real income D. decreased GNP The answer to the question is: A. increased real income An increase in nominal income without an increase in price will result in increased real income. This is because…
A MINIMUM PRICE LEGISLATION IS ALSO CALLED
A. price ceiling B. price mechanism C. price control D. price floor ✓ The answer to the question is: D. price floor A minimum price legislation, also known as a price floor, is a government-imposed limit on how low a price can be charged…
IF THE QUANTITY DEMANDED OF A COMMODITY INCREASES FROM 20 UNITS TO 30 UNITS WHEN THERE IS AN INCREASE IN PRICE FROM 4.00 DOLLARS TO 5.00 DOLLARS, THE ELASTICITY OF DEMAND IS
The elasticity of demand is a measure of the responsiveness of the quantity demanded of a commodity to a change in its price. It is calculated using the following formula: Elasticity of Demand = Percentage Change in Quantity Demanded /…
THE DEMAND FOR A GOOD IS PRICE INELASTIC IF
A. The price elasticity is less than one ✓ B. The price elasticity is one C. The price elasticity is negative D. The price elasticity is greater than one The answer to the question is: A. The price elasticity is less than one…
PRICE MIX
Price is the money consideration for goods and services, i.e ., the exchange value, whereas price mix is the placing of price on a particular product that will suit the customers and fetch higher revenue to the manufacturer. The components…
DETERMINATION OF PRICE BY DEMAND AND SUPPLY
In a market, there are buyers and sellers. The buyers bring their money to the market to buy the goods (demand) while the sellers bring the goods to the market for sale (supply). Market equilibrium is determined by the interaction…
PRINCIPLES OF SUPPLY
Supply may be defined as the quantity of goods which a producer is willing and ready to offer for sale at a given price over a given period of time. It can also be defined as the ability and willingness…
PRICING
Price is the sum or amount of money at which a thing is valued, or the value which a seller sets on his goods in the market; that for which something is bought or sold, or offered for sale; equivalent…