Multiple Choice
The longer the time period considered, the more the elasticity of supply tends to:
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4. Elasticity
Price Elasticity of Supply
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Supply is said to be ____________ when the quantity supplied is very responsive to changes in price.
A
inelastic
B
perfectly inelastic
C
elastic
D
unit elastic
Verified step by step guidance1
Understand the concept of price elasticity of supply, which measures how much the quantity supplied of a good responds to a change in its price.
Recall that if the quantity supplied changes significantly when the price changes, the supply is considered elastic.
Recognize that 'inelastic' supply means quantity supplied changes very little with price changes, while 'perfectly inelastic' means quantity supplied does not change at all regardless of price.
Note that 'unit elastic' supply means the percentage change in quantity supplied is exactly equal to the percentage change in price.
Therefore, when the quantity supplied is very responsive to price changes, the correct term to fill in the blank is 'elastic'.
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