Supply is likely to be more price elastic ?
Correct answer: D. If it is easy to expand output
- A. In the short run rather than the long run
- B. If factors of production are relatively immobile between industries
- C. If there are very few producers
- D. If it is easy to expand output
Explanation
Supply is more price elastic when producers can readily expand output in response to a price rise. Easy expansion allows a relatively large quantity response, unlike immobile factors or a short time period.
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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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