Question

In: Economics

True or False: For high levels of quantity supplied where firms have reached near maximum capacity


The following graph shows the supply of a good. 

image.png

For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic. 

image.png

True or False: For high levels of quantity supplied where firms have reached near maximum capacity, supply becomes more elastic because firms may need to invest in additional capital in order to increase production further.

Solutions

Expert Solution

Between Y and Z - inelastic

Between W and X- elastic

When % change in price is greater than % change in quantity supplied, supply is inelastic.

False- supply becomes more inelastic at higher levels of production.


Related Solutions

“An increase in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied.” Is this statement true or false?
“An increase in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied.” Is this statement true or false? Explain
Which of the following statements is true? a The quantity supplied (Qs) of a good is...
Which of the following statements is true? a The quantity supplied (Qs) of a good is the quantity of a good that all sellers in a market would choose to sell at different prices, given their constraints. b The main constraints sellers face are their financial budget and the prices of inputs. c Market supply is just the aggregation of all individual firms’ supplies in the market. d All of the above. e Only a) and b) Question 27 (1...
Determine whether each statement is true or false. If the statement is false, explain why. Even if the correlation coefficient is high (near + 1) or low (near - 1), it may not be significant.
Determine whether each statement is true or false. If the statement is false, explain why.Even if the correlation coefficient is high (near + 1) or low (near - 1), it may not be significant.
Is this statement true or false? Explain why it is true or false. Two firms, 1...
Is this statement true or false? Explain why it is true or false. Two firms, 1 and 2, can control their emissions of a pollutant according to the following marginal cost equations: MC1 = $1*q1 and MC2 = $1/2*q2, where q1 and q2 are the amount of emissions controlled by firm 1 and firm 2, respectively. In addition, each firm is currently emitting 100 units of pollution and neither firm is controlling its emissions. Assuming the control authority has concluded...
PART 6: True or false and multiple-choice questions Question 16: True or false, firms in situation...
PART 6: True or false and multiple-choice questions Question 16: True or false, firms in situation of monopolistic competition have deadweight losses associated with monopoly because of barriers to entry. Question 17: Which of the two demands functions below is most elastic A) Qa=100-2p B) Qb=120-p Question 18: If a buyer values an object for $4 and a seller’s cost is $1, which of the statements below is false! If a transaction takes place, total surplus will be equal to...
True or false: The quantity represented by ω0 is a function of time (i.e., is not...
True or false: The quantity represented by ω0 is a function of time (i.e., is not constant). True or false: The quantity represented by ω is a function of time (i.e., is not constant Which of the following equations is not an explicit function of time t, that is, does not involve t as a variable, and is therefore useful when you do not know or do not need the time? θ=θ0+ω0t+(1/2)αt2 ω=ω0+αt ω2=ω02+2α(θ−θ0) In the equation ω=ω0+αt, what does...
TRUE OF FALSE: The value of a convertible bond as debt sets the maximum price of...
TRUE OF FALSE: The value of a convertible bond as debt sets the maximum price of the bond.​
Some firms eventually experience problems with their capacity to produce output as their output levels increase....
Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms, a. supply is less elastic at low levels of output and more elastic at high levels of output. b. market power is substantial. c. supply is more elastic at low levels of output and less elastic at high levels of output. d. supply is perfectly inelastic. 1 points    QUESTION 2 Scenario 5-4 Milk has an inelastic demand, and beef has...
What are some cities, states, and counties that have reached carrying capacity ? - what made...
What are some cities, states, and counties that have reached carrying capacity ? - what made them reach carrying capacity?
True or False Low levels of internal consistency are better as they demonstrate that the scale...
True or False Low levels of internal consistency are better as they demonstrate that the scale has individual questions addressing all the areas of interest for the researcher, explain
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT