Which of the following is true?
I.The supply of a good is inelastic if when its price changes,the percentage change in the quantity supplied exceeds the percentage change in price.
II.Price elasticity of supply equals the percentage change in the quantity supplied divided by the percentage change in price.
III.If demand is price elastic,a rise in price leads to a decrease in total revenue.
A) Only I
B) Only II
C) Only III
D) I and II
E) II and III

Question

Quizplus · Accepted Answer

II is true because price elasticity of supply is defined as the percentage change in quantity supplied divided by the percentage change in price. III is true because if demand is price elastic, a rise in price will cause a proportionally larger decrease in quantity demanded, leading to a decrease in total revenue.

Which of the Following Is True