Is the price elasticity of supply for gold

(A) elastic

(B) inelastic

Next answer the following fill in the blank question, the price elasticity of supply measures the responsiveness of ...... (what) to a change in price?

Next, assume the price fluctuations for gold result exclusively from changes in demand. Answer the following question multiple choice question.

If the supply curve for gold was much more elastic than it is today, the effect of a change in demand will be ..... on the quantity demanded than on price compared with today?

(A) greater

(B) less

Question 1:

Is the price elasticity of supply for gold (A) elastic (B) inelastic?

The correct answer is (B) inelastic.

The supply for gold is inelastic since the supply or the production for gold is limited. An increase in the price of gold will have a very mall effect on the quantity supplied of gold.

Question 2:

The price elasticity of supply measures the responsiveness of the quantity supplied to a change in price.

Question 3:

Assume the price fluctuations for gold result exclusively from changes in demand. If the supply curve for gold was much more elastic than it is today, the effect of a change in demand will be (B) less on the quantity demanded than on price compared with today.

The supply for gold is generally inelastic. The statement If the supply curve for gold was much more elastic than it is today... does not mean that the supply for gold was elastic. It only means that the supply for gold was less inelastic than it is today.