Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 8 - Pure Competition in the Short Run - Quick Quiz for Figure 8.6 - Page 174: 4

Answer

B. supply curve is inelastic over the Q4–Q5 range of output

Work Step by Step

The percentage change in price is (5/12.5)*(100) and the percentage change in quantity is (2/9)*(100). Therefore the elasticity of supply is 0.55, which means supply is inelastic. Option C is incorrect because revenue will rise and option D is incorrect because price shifting does not shifts MC Curve.
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