question archive Just as consumer sensitivity to changes in price and in the determinants of demand (DOD) may be measured through demand elasticities, producer sensitivity to changes in price and in the determinants of supply (DOS) may be measured through supply elasticities
Just as consumer sensitivity to changes in price and in the determinants of demand (DOD) may be measured through demand elasticities, producer sensitivity to changes in price and in the determinants of supply (DOS) may be measured through supply elasticities
Subject:EconomicsPrice:2.88 Bought3
Just as consumer sensitivity to changes in price and in the determinants of demand (DOD) may be measured through demand elasticities, producer sensitivity to changes in price and in the determinants of supply (DOS) may be measured through supply elasticities. The price elasticity of supply measures how:
a. responsive the quantity supplied of a good is to changes in market demand
b. responsive the price of a good is to changes in quantity supplied
c. responsive the quantity supplied of a good is to changes in its price
d. responsive the quantity supplied of a good is to changes in producer surplus
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C. Responsive the quantity supplied of a good is to change in its price
Reason : Elasticity is the percentage of quantiy supplied of the good divided by the percentage change in price of the good. If the quantity supplied increases more than proportionately to the change in price then the supply is said to be realtively more elastic. However, if the quantity supplied of the good increases less than proportionately to the change in price, then the supply is said to be relatively inelastic
