Question

This question is based on the previous one, which was: Quantity supplied decreases from 70 to 50 units when price decreases from $200 to $120 per unit. Elasticity of supply is: The elasticity value calculated in the previous question indicated that supply is: Select one: O a. Relatively inelastic O b. Relatively inelastic c. Perfectly Inelastic d. Unit Elastic e. Perfectly Elastic O When producers have more time to respond to price changes, supply will likely be more Select one: a. Can't Say for Sure @ b. Inelastic c. Unit Elastic d. Elastic

Answer 1

Ans.1- relatively inelastic

Elasticity of supply is 0.714 which is less than 1 so its relatively inelastic.

Ans.2-Elastic

Along a longer time interval, both the demand and supply are likely to be more elastic because both the consumers and producers have more time to adjust to a given price change. Moreover, all factors can be varied in the long run which also makes supply more elastic.