Which factor generally makes the supply of a product more price elastic?
Correct answer: C. Greater spare production capacity
- A. A shorter period for producers to adjust
- B. Fewer available production substitutes
- C. Greater spare production capacity
- D. A more fixed quantity of production inputs
Explanation
Spare capacity allows firms to expand output more easily when price rises, making supply more responsive. A short adjustment period and fixed inputs usually make supply less elastic.
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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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