ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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change in price causes a sensitive response in quantity demanded
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a change in price causes a small change in quantity supplied
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change in price causes a sensitive response in the quantity supplied
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change in price causes an insensitive response in quantity demanded
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Detailed explanation-1: -Price elasticity of supply measures the responsiveness to the supply of a good or service after a change in its market price. According to basic economic theory, the supply of a good will increase when its price rises. Conversely, the supply of a good will decrease when its price decreases.
Detailed explanation-2: -Price elasticity of supply (PES) measures the responsiveness of quantity supplied to a change in price. PES reflects the ability of producers to change the their output following a change in demand and the possible consequences for the marginal cost of supply.
Detailed explanation-3: -Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded-or supplied-divided by the percentage change in price.
Detailed explanation-4: -Supply elasticity is a measure of the responsiveness of an industry or a producer to changes in demand for its product. The availability of critical resources, technology innovation, and the number of competitors producing a product or service also are factors.
Detailed explanation-5: -The price elasticity of supply is a measure of how sensitive the quantity supplied of a good is to changes in price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.