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

- Statement i is incorrect because if the supply of a good is inelastic, the percentage change in the quantity supplied is less than the percentage change in price, not more.- Statement ii is correct as it accurately describes the calculation for the price elasticity of supply.- Statement iii is also correct because when demand is price elastic, a rise in price will lead to a decrease in the quantity demanded that is proportionally larger, thus decreasing total revenue.

Which of the Following Is True