The total-revenue test for elasticity: A.is equally applicable to both demand an

Question

The total-revenue test for elasticity: A.is equally applicable to both demand and supply. B.does not apply to demand because price and quantity areinversely related. C.does not apply to supply because price and quantity aredirectly related. D.applies to the short-run supply curve, but not to thelong-run supply curve. The total-revenue test for elasticity: A.is equally applicable to both demand and supply. B.does not apply to demand because price and quantity areinversely related. C.does not apply to supply because price and quantity aredirectly related. D.applies to the short-run supply curve, but not to thelong-run supply curve.

Explanation / Answer

Answer   C.does not apply to supply because price andquantity are directly related. Explanation A company does not need to test for elasticity of its own product'ssupply. It never needs to test its supplier's ability orwillingness to supply.

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