ECONOMICS
TECHNOLOGY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Existing producers expand, and new producers enter the market.
|
|
|
Some producers produce less, and others drop out of the market.
|
|
|
Existing firms continue their usual output but earn less.
|
|
|
New firms enter the market as older ones drop out.
|
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: -The price elasticity of demand varies between different pairs of points along a linear demand curve. The lower the price and the greater the quantity demanded, the lower the absolute value of the price elasticity of demand.
Detailed explanation-3: -b) If demand is price elastic, then decreasing price will increase revenue.
Detailed explanation-4: -A good or service has an elastic supply when the percentage change in the quantity supplied exceeds the percentage change in price. In most cases, the provider can respond quickly to a price change.