Economics (AS & A Level) · Feb / March 2022 · Paper 12 · Question 10
9708Price elasticity of supply
A firm estimates that the price elasticity of supply of its product is +1.5. What does this indicate?
- AThe firm has available stock.
- BThe firm has no excess capacity.
- CThe firm operates in a competitive market.
- DThe firm raises its price by 10% and its total revenue increases by 15%.
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Correct answer: A. The firm has available stock.
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