ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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shorter the time period considered, more inelastic supply will be
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Longer the time period considered, more elastic supply will be
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Longer the time period considered, more inelastic supply will be
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shorter the time period considered, more elastic supply will be
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Detailed explanation-1: -Time also exerts considerable influence on the elasticity of supply. Supply is more elastic in the long run than in the short run. The reason is easy to find out. The longer the time period the easier it is to shift resources among products, following a change in their relative prices.
Detailed explanation-2: -Supply is normally more elastic in the long run than in the short run for produced goods, since it is generally assumed that in the long run all factors of production can be utilized to increase supply, whereas in the short run only labor can be increased, and even then, Page 2 changes may be prohibitively costly.
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 longer the period of time, higher the price elasticity of demand. This is due to the fact that over a period of time, consumers get adjusted to change in prices or new prices.
Detailed explanation-5: -Goods that can be produced in only a fixed quantity have a perfectly inelastic supply. As time passes after a price change, producers find it easier to change their production plans, so supply becomes more elastic.