Practice_Problems_03 - 4. A) Elasticity of supply indicates...

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Notes 03: Answers to Practice Problems 1. B) A rise in the price of inputs causes a decrease in supply. 2. A) The supply curve shows the marginal cost of producing the Qth unit. 3. E) Both (B) and (C) increase the cost of “producing” puppies, while (A) would cause a movement along the supply curve, or equivalently a change in the quantity supplied.
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Unformatted text preview: 4. A) Elasticity of supply indicates how responsive supply is to changes in price. Perfectly inelastic means there is no response. 5. E) Both (A) and (B) describe total revenue, while (C) describes total value. 6. A) Marginal profit is the additional profit received from selling one more unit....
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