ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the greatest factor.
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the least factor.
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Either A or B
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None of the above
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Detailed explanation-1: -As with demand elasticity, the most important determinant of elasticity of supply is the availability of substitutes.
Detailed explanation-2: -Know that time has the greatest influence on elasticity and inelasticity of supply. Know what is a fixed cost for a store. Increased government regulations cause the supply curve to shift to the right.
Detailed explanation-3: -The price elasticity of supply is greater when the length of time under consideration is longer because over time producers have more options for adjusting to the change in price. When applied to labor supply, the price elasticity of supply is usually positive but can be negative.
Detailed explanation-4: -The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed.