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The Price Elasticity of Supply for a Good Is 3

Question 243

Essay

The price elasticity of supply for a good is 3 if a:
A.1% increase in price leads to a 3% decrease in the quantity supplied.
B.1% decrease in price leads to a 3% decrease in the quantity supplied.
C.9% decrease in price leads to a 3% decrease in the quantity supplied.
D.9% increase in price leads to a 3% decrease in the quantity supplied.

Correct Answer:

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1% decrease in price...

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