1.

The measures how much

a. the quantity supplied responds to changes in input prices.
b. the quantity supplied responds to changes in the price of the good.
c. the price of the good responds to changes in supply.
d. sellers respond to changes in technology.
ANSWER: b

2. The measures how responsive

a. sellers are to a change in price.
b. sellers are to a change in buyers' income.
c. buyers are to a change in production costs.
d. equilibrium price is to a change in supply.
ANSWER: a

3. The measures how responsive

a. equilibrium price is to equilibrium quantity.
b. sellers are to a change in buyers' income.
c. sellers are to a change in price.
d. consumers are to the number of substitutes.
ANSWER: c

4. If the quantity supplied responds only slightly to changes in price, then

a. supply is said to be elastic.
b. supply is said to be inelastic.
c. an increase in price will not shift the supply curve very much.
d. even a large decrease in demand will change the equilibrium price only slightly.
ANSWER: b

5. A linear, upward-sloping supply curve has

a. a constant slope and a changing .

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 b. a changing slope and a constant .
c. both a constant slope and a constant .
d. both a changing slope and a changing .
ANSWER: a

6. A key determinant of the is the time period under consideration. Which of the following statements best explains this
fact?
a. Supply curves are steeper over long periods of time than over short periods of time.
b. Buyers of goods tend to be more responsive to price changes over long periods of time than over short periods
of time.
c. The number of firms in a market tends to be more variable over long periods of time than over short periods of
time.
d. Firms prefer to change their prices in the short run rather than in the long run.
ANSWER: c

7. A key determinant of the is the

a. time horizon.
b. income of consumers.
c. price elasticity of demand.
d. importance of the good in a consumer’s budget.
ANSWER: a

8. A key determinant of the is the

a. number of close substitutes for the good in question.
b. extent to which buyers alter their quantities demanded in response to changes in prices.
c. length of the time period.
d. extent to which buyers alter their quantities demanded in response to changes in their incomes.
ANSWER: c

9. A key determinant of the is

a. the ability of sellers to change the price of the good they produce.
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 b. the ability of sellers to change the amount of the good they produce.
c. how responsive buyers are to changes in sellers' prices.
d. the slope of the demand curve.
ANSWER: b

10. If the for wheat is less than 1, then the supply of wheat is
a. inelastic.
b. elastic.
c. unit elastic.
d. quite sensitive to changes in income.
ANSWER: a
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11. The supply of a good will be more elastic, the

a. more the good is considered a luxury.
b. broader is the definition of the market for the good.
c. larger the number of close substitutes for the good.
d. longer the time period being considered.
ANSWER: d
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12. Frequently, in the short run, the quantity supplied of a good is

a. impossible, or nearly impossible, to measure.
b. not very responsive to price changes.
c. determined by the quantity demanded of the good.
d. determined by psychological forces and other non-economic forces.
ANSWER: b
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13. In the long run, the quantity supplied of most goods
a. will increase in almost all cases, regardless of what happens to price.
b. cannot respond at all to a change in price.
c. can respond to a change in price, but the change is almost always inconsequential.
d. can respond substantially to a change in price.
ANSWER: d
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14. Some firms eventually experience problems with their capacity to produce output as their output levels increase. For
these firms,
a. market power is substantial.
b. supply is perfectly inelastic.
c. supply is more elastic at low levels of output and less elastic at high levels of output.
d. supply is less elastic at low levels of output and more elastic at high levels of output.
ANSWER: c
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15. Generally, a firm is more willing and able to increase quantity supplied in response to a price change when
a. the relevant time period is short rather than long.
b. the relevant time period is long rather than short.
c. supply is inelastic.
d. the firm is experiencing capacity problems.
ANSWER: b
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16. The along a typical supply curve is

a. constant.
b. equal to zero.
c. higher at low levels of quantity supplied and lower at high levels of quantity supplied.
d. lower at low levels of quantity supplied and higher at high levels of quantity supplied.
ANSWER: c

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17. Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following
statements is correct?
a. The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper
supply curve.
b. The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter
supply curve.
c. Given two prices with which to calculate the , that elasticity would be the same for both curves.
d. A decrease in demand will increase total revenue if the steeper supply curve is relevant, while a decrease in
demand will decrease total revenue if the flatter supply cure is relevant.
ANSWER: b
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18. When a supply curve is relatively flat, the

a. sellers are not at all responsive to a change in price.
b. equilibrium price changes substantially when the demand for the good changes.
c. supply is relatively elastic.
d. supply is relatively inelastic.
ANSWER: c
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19. When a supply curve is relatively flat,

a. sellers are not very responsive to changes in price.
b. supply is relatively inelastic.
c. supply is relatively elastic.
d. Both a and b are correct.
ANSWER: c
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:

20. As increases, the supply curve

a. becomes flatter.
b. becomes steeper.
c. becomes downward sloping.
d. shifts to the right.
ANSWER: a
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21. If the is 1.5, and a price increase led to a 1.8% increase in quantity supplied, then the price increase is about
a. 0.67%.
b. 0.83%.
c. 1.20%.
d. 2.70%.
ANSWER: c
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22. If the is 0.4, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
a. 0.25%.
b. 1.2%.
c. 2%.
d. 12.5%.
ANSWER: d
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23. If the is 1.5, and a price increase led to a 3% increase in quantity supplied, then the price increase is about
a. 0.2%.
b. 0.5%.
c. 2.0%.
d. 4.5%.
ANSWER: c
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24. If the is 1.2, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
a. 0.24%.
b. 4.2%.
c. 6%.
d. 6.2%.
ANSWER: b
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25. If the is 1.2, and price increased by 5%, quantity supplied would
a. increase by 4.2%.
b. increase by 6%.
c. decrease by 4.2%.
d. decrease by 6%.
ANSWER: b
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26. If the is 0.8, and price increased by 5%, quantity supplied would
a. increase by 4%.
b. increase by 6.25%.
c. decrease by 4%.
d. decrease by 6.25%.
ANSWER: a
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27. If a 25% change in price results in a 40% change in quantity supplied, then the is about

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 a. 0.63, and supply is elastic.
b. 0.63, and supply is inelastic.
c. 1.60, and supply is elastic.
d. 1.60, and supply is inelastic.
ANSWER: c
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28. If a 40% change in price results in a 25% change in quantity supplied, then the is about
a. 0.63, and supply is elastic.
b. 0.63, and supply is inelastic.
c. 1.60, and supply is elastic.
d. 1.60, and supply is inelastic.
ANSWER: b
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29. If a 15% change in price results in a 20% change in quantity supplied, then the is about
a. 1.33, and supply is elastic.
b. 1.33, and supply is inelastic.
c. 0.75, and supply is elastic.
d. 0.75, and supply is inelastic.
ANSWER: a
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30. If a 20% change in price results in a 15% change in quantity supplied, then the is about
a. 1.33, and supply is elastic.
b. 1.33, and supply is inelastic.
c. 0.75, and supply is elastic.
d. 0.75, and supply is inelastic.
ANSWER: d
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31. If a 30 percent change in price causes a 15 percent change in quantity supplied, then the is about
a. 0.5, and supply is elastic.
b. 0.5, and supply is inelastic.
c. 2, and supply is inelastic.
d. 2, and supply is elastic.
ANSWER: b
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32. Suppose the for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes
the price of cheese to increase by 15%, then the quantity supplied of cheese will increase by
a. 0.4% in the short run and 4.6% in the long run.
b. 1.7% in the short run and 0.7% in the long run.
c. 9% in the short run and 21% in the long run.
d. 25% in the short run and 10.7% in the long run.
ANSWER: c
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33. Suppose the for soccer balls is 0.3 in the short run and 1.2 in the long run. If an increase in the demand for soccer
balls causes the price of soccer balls to increase by 20%, then the quantity supplied of soccer balls will increase by about
a. 0.67% in the short run and 0.17% in the long run.
b. 3% in the short run and 1.2% in the long run.
c. 6% in the short run and 24% in the long run.
d. 66.7% in the short run and 16.7% in the long run.
ANSWER: c
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34. Suppose the for minivans is 0.3 in the short run and 1.2 in the long run. If an increase in the demand for minivans
causes the price of minivans to increase by 5%, then the quantity supplied of minivans will increase by about
a. 1.5% in the short run and 6% in the long run.
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 b. 6% in the short run and 1.5% in the long run.
c. 16.7% in the short run and 4.2% in the long run.
d. 4.2% in the short run and 16.7% in the long run.
ANSWER: a
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35. If the for a window manufacturer is 1.5,

a. a 10% increase in the price of windows results in a 15% increase in the quantity of windows supplied.
b. supply is considered to be inelastic.
c. the manufacturer is likely operating very near capacity.
d. All of the above are correct.
ANSWER: a
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36. In which of the following situations would supply be the most elastic?
a. An auto parts manufacturer is operating at capacity.
b. A real estate developer in Boston is looking to build condos on the waterfront.
c. A furniture manufacturer is operating its factory 8 hours per day.
d. A hotel has all of its rooms booked for each night of the next 3 months.
ANSWER: c
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Scenario 5-3
Suppose that the supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered
to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both
goods by 10%.
37. Refer to Scenario 5-3. The for aged cheddar cheese could be
a. -1.
b. 0.
c. 0.5.
d. 1.5.
ANSWER: c
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38. Refer to Scenario 5-3. The for bread could be

a. -1.
b. 0.
c. 0.5.
d. 1.5.
ANSWER: d
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Table 5-9

Supply Curve A Supply Curve B Supply Curve C

Price $1.00 $2.00 $1.00 $3.00 $2.00 $5.00
Quantity Supplied 500 600 600 900 400 700

39. Refer to Table 5-9. Which of the three supply curves represents the least elastic supply?
a. supply curve A
b. supply curve B
c. supply curve C
d. There is no difference in the elasticity of the three supply curves.
ANSWER: a
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40. Refer to Table 5-9. Which of the three supply curves represents the most elastic supply?
a. supply curve A
b. supply curve B
c. supply curve C
d. There is no difference in the elasticity of the three supply curves.
ANSWER: c
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41. Refer to Table 5-9. Along which of the supply curves does quantity supplied move proportionately more than the
price?
a. along supply curve B only
b. along supply curves B and C
c. along all three supply curves
d. None. Quantity supplied moves proportionately less than the price along all of the three supply curves.
ANSWER: d
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Table 5-10

Supply Curve X Supply Curve Y Supply Curve Z

Price $5.00 $7.00 $5.00 $7.00 $5.00 $7.00
Quantity Supplied 200 300 300 400 400 500

42. Refer to Table 5-10. Using the midpoint method, which of the three supply curves has the most inelastic ?
a. Supply curve X
b. Supply curve Y
c. Supply curve Z
d. There is no difference in the elasticities of the three supply curves.
ANSWER: c
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43. Refer to Table 5-10. Using the midpoint method, which of the three supply curves has the most elastic ?
a. Supply curve X
b. Supply curve Y
c. Supply curve Z
d. There is no difference in the elasticity of the three supply curves.
ANSWER: a
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44. A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market
price is $12 per unit. Using the midpoint method, for this range of prices, the is about
a. 0.45.
b. 2.0.
c. 2.2.
d. 200.
ANSWER: c
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45. At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee
shop would be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the is about
a. 0.45
b. 0.90
c. 1.11
d. 2.20
ANSWER: d
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46. At a price of $1.20, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.40, the coffee
shop would be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the is about
a. 0.15
b. 0.375
c. 2.5
d. 2.60
ANSWER: d
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47. On a certain supply curve, one point is (quantity supplied = 200, price = $4.00) and another point is (quantity supplied
= 250, price = $4.50). Using the midpoint method, the is about
a. 0.22.
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 b. 0.53.
c. 1.00.
d. 1.89.
ANSWER: d
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48. On a certain supply curve, one point is (quantity supplied = 200, price = $2.00) and another point is (quantity supplied
= 250, price = $2.50). Using the midpoint method, the is about
a. 0.2.
b. 0.5.
c. 1.0.
d. 2.5.
ANSWER: c
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49. Holding all other factors constant and using the midpoint method, if a candy manufacturer increases production by 20
percent when the market price of candy increases from $0.50 to $0.60, then supply is
a. inelastic, since the is equal to .91.
b. inelastic, since the is equal to 1.1.
c. elastic, since the is equal to 0.91.
d. elastic, since the is equal to 1.1.
ANSWER: d
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50. Holding all other factors constant and using the midpoint method, if a tractor manufacturer increases production from
80 to 100 units when price increases by 15 percent, then supply is
a. inelastic, since the is equal to 0.68.
b. inelastic, since the is equal to 1.48.
c. elastic, since the is equal to 0.68.
d. elastic, since the is equal to 1.48.
ANSWER: d
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51. Suppose that an increase in the price of melons from $1.30 to $1.80 per pound increases the quantity of melons that
melon farmers produce from 1.2 million pounds to 1.6 million pounds. Using the midpoint method, what is the
approximate value of the ?
a. 0.67
b. 0.89
c. 1.00
d. 1.13
ANSWER: b
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52. An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase
their quantity supplied from 125 boxes per minute to 145 boxes per minute. Using the midpoint method, supply is
a. elastic, and the is 1.74.
b. elastic, and the is 0.57.
c. inelastic, and the is 1.74.
d. inelastic, and the is 0.57.
ANSWER: a
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53. A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would
be willing to supply 1,100 bagels. Using the midpoint method, the for bagels is about
a. 0.62.
b. 0.77.
c. 1.24.
d. 1.63.
ANSWER: d
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54. A t-shirt maker would be willing to supply 75 t-shirts per day at a price of $18.00 each. At a price of $20.00, the t-shirt
maker would be willing to supply 100 t-shirts. Using the midpoint method, the for t-shirts is about
a. 0.37, and supply is elastic.
b. 0.37, and supply is inelastic.
c. 2.71, and supply is elastic.
d. 2.71, and supply is inelastic.
ANSWER: c
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55. In January the price of dark chocolate candy bars was $2.00, and Willy’s Chocolate Factory produced 80 pounds. In
February the price of dark chocolate candy bars was $2.50, and Willy’s produced 110 pounds. In March the price of dark
chocolate candy bars was $3.00, and Willy’s produced 140 pounds. The of Willy’s dark chocolate candy bars was about
a. 0.70 when the price increased from $2.00 to $2.50 and 0.76 when the price increased from $2.50 to $3.00.
b. 0.88 when the price increased from $2.00 to $2.50 and 1.08 when the price increased from $2.50 to $3.00.
c. 1.42 when the price increased from $2.00 to $2.50 and 1.32 when the price increased from $2.50 to $3.00.
d. 1.50 when the price increased from $2.00 to $2.50 and 1.18 when the price increased from $2.50 to $3.00.
ANSWER: c
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56. In January the price of widgets was $1.00, and Wendy's Widgets produced 80 widgets. In February the price of
widgets was $1.50, and Wendy's Widgets produced 110 widgets. In March the price of widgets was $2.00, and Wendy's
Widgets produced 140 widgets. The of Wendy's Widgets was about
a. 0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.
b. 1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00.
c. 0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00.
d. 1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.
ANSWER: a
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57. At price of $1.20, a local pencil manufacturer is willing to supply 150 boxes per day. At a price of $1.40, the
manufacturer is willing to supply 170 boxes per day. Using the midpoint method, the is about
a. 2.0.

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 b. 1.23.
c. 1.00.
d. 0.81.
ANSWER: d
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58. At price of $1.30 per pound, a local apple orchard is willing to supply 150 pounds of apples per day. At a price of
$1.50 per pound, the orchard is willing to supply 170 pounds of apples per day. Using the midpoint method, the is about
a. 1.14.
b. 1.00.
c. 0.875.
d. 0.50.
ANSWER: c
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59. At price of $1.25, a paper manufacturer is willing to supply 150 spiral notebooks per day. At a price of $1.50, the
paper manufacturer is willing to supply 175 spiral notebooks per day. Using the midpoint method, the is about
a. 1.18.
b. 1.00.
c. 0.85.
d. 0.25.
ANSWER: c
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Figure 5-14

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60. Refer to Figure 5-14. Over which range is the supply curve in this figure the most elastic?
a. $16 to $40
b. $40 to $100
c. $100 to $220
d. $220 to $430
ANSWER: a
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61. Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?
a. $16 to $40
b. $40 to $100
c. $100 to $220
d. $220 to $430
ANSWER: d
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62. Refer to Figure 5-14. Using the midpoint method, what is the between $16 and $40?
a. 0.125
b. 0.86
c. 1.0
d. 2.5
ANSWER: c
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63. Refer to Figure 5-14. Using the midpoint method, what is the between $100 and $220?
a. 0.58
b. 0.67
c. 1.00
d. 1.73
ANSWER: a
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Figure 5-15

64. Refer to Figure 5-15. Along which of these segments of the supply curve is supply least elastic?
a. GH
b. CD
c. AC
d. AB
ANSWER: a
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65. Refer to Figure 5-15. Along which of these segments of the supply curve is supply most elastic?
a. AB
b. CD
c. DH
d. GH
ANSWER: a
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66. Refer to Figure 5-15. Using the midpoint method, what is the between points A and B?
a. 2.33
b. 1.0
c. 0.43
d. 0.1
ANSWER: a
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67. Refer to Figure 5-15. Using the midpoint method, what is the between points B and C?
a. 1.67
b. 1.19
c. 0.84
d. 0.61
ANSWER: b
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68. Refer to Figure 5-15. Using the midpoint method, what is the between points C and D?
a. 0.21
b. 0.29
c. 0.73
d. 1.36
ANSWER: c
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69. Refer to Figure 5-15. Using the midpoint method, what is the between points D and G?
a. 1.89
b. 1.26
c. 0.53
d. 0.34
ANSWER: c
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Figure 5-16

70. Refer to Figure 5-16. Using the midpoint method, what is the between $4 and $6?
a. 0.75
b. 1.00
c. 1.20
d. 1.25
ANSWER: d
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71. Refer to Figure 5-16. Using the midpoint method, what is the between $6 and $8?
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 a. 0.86
b. 1.00
c. 1.17
d. 1.25
ANSWER: c
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Figure 5-17

72. Refer to Figure 5-17. Using the midpoint method, what is the between point A and point B?
a. 0.4
b. 0.6
c. 1.67
d. 2.16
ANSWER: c
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73. Refer to Figure 5-17. Using the midpoint method, what is the between point B and point C?
a. 1.44
b. 1.29
c. 0.96
d. 0.69

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ANSWER: a
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74. Refer to Figure 5-17. If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium
price to increase from $6 to $7, then sellers’ total revenue would
a. increase.
b. decrease.
c. remain unchanged.
d. The effect on total revenue cannot be determined from the given information.
ANSWER: a
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Figure 5-18

75. Refer to Figure 5-18. Using the midpoint method, what is the between $4 and $5?
a. 0.50
b. 0.56
c. 1.80
d. 2.00
ANSWER: c
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76. Refer to Figure 5-18. Using the midpoint method, what is the between $5 and $6?
a. 0.60
b. 0.64
c. 1.57
d. 1.67
ANSWER: c
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77. If sellers respond to very small changes in price by adjusting their quantity supplied by extremely large amounts, the
approaches
a. zero, and the supply curve is horizontal.
b. zero, and the supply curve is vertical.
c. infinity, and the supply curve is horizontal.
d. infinity, and the supply curve is vertical.
ANSWER: c
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78. Which of the following statements is valid when supply is perfectly elastic at a price of $4?
a. The elasticity of supply approaches infinity.
b. The supply curve is vertical.
c. At a price below $4, quantity supplied is infinite.
d. At a price above $4, quantity supplied is zero.
ANSWER: a
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79. Which of the following statements is not valid when supply is perfectly elastic?
a. The elasticity of supply approaches infinity.
b. The supply curve is horizontal.
c. Very small changes in price lead to very large changes in quantity supplied.
d. The time period under consideration is more likely a short period rather than a long period.
ANSWER: d

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80. When supply is perfectly elastic, the value of the is

a. 0.
b. 1.
c. greater than 0 and less than 1.
d. infinity.
ANSWER: d
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81. As the approaches infinity, very small changes in price lead to

a. very large changes in quantity supplied.
b. very small changes in quantity supplied.
c. no change in quantity supplied.
d. None of the above is correct.
ANSWER: a
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82. If the for a good is equal to infinity, then the

a. supply curve is vertical.
b. supply curve is horizontal.
c. supply curve also has a slope equal to infinity.
d. quantity supplied is constant regardless of the price.
ANSWER: b
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83. A manufacturer produces 1,000 units, regardless of the market price. For this firm, the is

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 a. infinity.
b. zero.
c. one.
d. negative one.
ANSWER: b
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84. If sellers do not adjust their quantity supplied at all in response to a change in price, the is
a. zero, and the supply curve is horizontal.
b. zero, and the supply curve is vertical.
c. infinity, and the supply curve is horizontal.
d. infinity, and the supply curve is vertical.
ANSWER: b
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85. Which of the following statements is valid when the market supply curve is vertical?
a. Market quantity supplied does not change when the price changes.
b. Supply is perfectly elastic.
c. An increase in market demand will increase the equilibrium quantity.
d. An increase in market demand will not increase the equilibrium price.
ANSWER: a
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86. Which of the following statements is not valid when the market supply curve is vertical?
a. Market quantity supplied does not change when the price changes.
b. Supply is perfectly inelastic.
c. An increase in market demand will increase the equilibrium quantity.
d. An increase in market demand will increase the equilibrium price.
ANSWER: c
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87. If the quantity supplied is the same regardless of price, then supply is
a. elastic.
b. perfectly elastic.
c. perfectly inelastic.
d. inelastic.
ANSWER: c
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88. If sellers do not adjust their quantities supplied at all in response to a change in price,
a. advances in technology must be prevalent.
b. the time period under consideration must be very long.
c. supply is perfectly elastic.
d. supply is perfectly inelastic.
ANSWER: d
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89. If the is zero, then

a. supply is more elastic than it is in any other case.
b. the supply curve is horizontal.
c. the quantity supplied is the same, regardless of price.
d. a change in demand will cause a relatively small change in the equilibrium price.
ANSWER: c
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90. Which of the following is an illustration of the market for original paintings by deceased artist Vincent Van Gogh?

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a.

b.

c.

d.

a. A
b. B
c. C
d. D
ANSWER: c
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Figure 5-19

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91. Refer to Figure 5-19. Which of the following statements is not correct?
a. Supply curve A is perfectly inelastic.
b. Supply curve B is perfectly elastic.
c. Supply curve C is unit elastic.
d. Supply curve D is more elastic than supply curve C.
ANSWER: c
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92. Refer to Figure 5-19. Which of the following statements is correct?

a. Supply curve A is perfectly elastic.
b. Supply curve B is perfectly inelastic.
c. Supply curve C is more inelastic than supply curve D.
d. Supply curve D is unit elastic.
ANSWER: c
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Figure 5-20

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93. Refer to Figure 5-20. Which supply curve is most likely relevant over a very long period of time?
a. S1
b. S2
c. S3
d. All of the above are equally likely to be relevant over a very long period of time.
ANSWER: c
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94. Refer to Figure 5-20. Which supply curve represents perfectly inelastic supply?
a. S1
b. S2
c. S3
d. None of the supply curves is perfectly inelastic.
ANSWER: a
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95. A candle manufacturer produces 4,000 units when the market price is $11 per unit and produces 6,000 units when the
market price is $13 per unit. Using the midpoint method, for this range of prices, the is about
a. 6.
b. 2.4.
c. 0.4.
d. 0.67.
ANSWER: b

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96. A tax accounting firm produces 500 tax returns units when the market price is $150 per return and produces 700 tax
returns when the market price is $170 per tax return. Using the midpoint method, for this range of prices, the is about
a. 2.67.
b. 0.67.
c. 0.4.
d. 0.125.
ANSWER: a
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