question archive Explain why is supply said to be elastic if the quantity supplied responds substantially to the changes in price
Subject:EconomicsPrice:2.88 Bought3
Explain why is supply said to be elastic if the quantity supplied responds substantially to the changes in price.
Supply is defined as being elastic if quantity supplied changes more than 1% when price changes by 1%. If as stated above quantity supplied "responds substantially" to changes in price, we can infer that this means a 1% change in price causes quantity supplied to change more than 1% and thus supply is elastic.