Please sort the statements into whether they are true or false.

- When supply is perfectly inelastic, a change in demand has no effect on the price.

- When the price increases, total revenue always increases because of the price effect: producers receive a higher price for the good.

- A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item.

- A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand.

- The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly.

When supply is perfectly inelastic, a change in demand has no effect on the price.

False When supply is perfectly inelastic, the effect of change in demand will change the price with no change in quantity supplied.

- When the price increases, total revenue always increases because of the price effect: producers receive a higher price for the good.

False When the price changes, the change in the total revenues for the producer will depend on the elasticity of demand.

- A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item.

TrueLuxury goods are elastic.

- A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand.

True The price of one would affect the quantity demanded of another.

- The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly.

FalseLong run supply of goods would be more elastic because the producer would get time to adjust his supply as per the price.