ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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supply is not very responsive to price change.
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supply is unit-elastic.
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supply is inelastic.
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supply is elastic.
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Detailed explanation-1: -The price elasticity of supply = % change in quantity supplied / % change in price.
Detailed explanation-2: -An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating a high responsiveness to changes in price. An inelastic demand or inelastic supply is one in which elasticity is less than one, indicating low responsiveness to price changes.
Detailed explanation-3: -Slope and Elasticity Consider the formula for calculating the slope of the supply curve. Now consider the formula for calculating the price elasticity of supply. The key differences between these are: First, price is in the numerator and quantity is in the denominator for slope.
Detailed explanation-4: -It is calculated as the percentage change in quantity supplied divided by the percentage change in price. If the elasticity is greater than one, supply is considered “elastic, ” while if it is less than one, supply is “inelastic."