If a supply curve for a good is price elastic then ?
Correct answer: A. the quantity supplied is sensitive to changes in the price of that good
- A. the quantity supplied is sensitive to changes in the price of that good
- B. That quantity demanded is insensitive to changes in the price of that good
- C. the quantity demanded is sensitive to changes in the price of that good
- D. the quantity supplied is incentive to changes in the price of that good
- E. None of these
Explanation
Price elasticity of supply measures how much quantity supplied responds to a change in the good’s own price. Thus, an elastic supply curve means quantity supplied is sensitive to price changes.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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