Industry profits are maximized in the figure below (QM1 = QM2):
A. at the point where r1 = r2.
B. only at point QM1.
C. only at point QM2.
D. on the line segment joining points QM1 and QM2.
Answer: D
Economics
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Suppose the price elasticity of supply for Good A is 0.7 and the price elasticity of supply for Good B is 1.7 . Given these values, which of the following statements is accurate?
a. Good A has an inelastic supply curve, while Good B has an elastic supply curve. b. Good B has an elastic supply curve, while Good B has an inelastic supply curve. c. Both Good A and Good B have an elastic supply curve. d. Both Good A and Good B have an inelastic supply curve.
Economics