For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic. Region Elastic Inelastic Between W and X Between Y and Z True or False: For high levels of quantity supplied where firms have reached near maximum capacity, supply becomes more elastic because firms may need to invest in additional capital in order to increase production further. True False

Which of the following statements best reflects a price-taking firm? price-taking firms maximize profits by charging a price above marginal cost. the firm can sell only a limited amount of output at the market price before the market price will fall. if the firm were to charge more than the going price, it would sell none of its goods. the firm has an incentive to charge less than the market price to earn higher revenue.