Asked by FRANCIS VENTURA on Jun 27, 2024
Verified
Decreases in input costs and a longer time since a price change will tend to:
A) increase the price elasticity of supply.
B) decrease price elasticity of supply.
C) have no impact on the price elasticity of supply.
D) increase price elasticity of supply with decreases in input costs but decrease price elasticity of supply with length of time.
Input Costs
Input costs are the prices of the raw materials, labor, and other resources required to produce a good or service.
Price Change
A variation in the cost of a good or service over time.
- Comprehend the principle of price elasticity of supply and its influencing factors.
Verified Answer
AV
Aneena VadayarJul 01, 2024
Final Answer :
A
Explanation :
Decreases in input costs can make it easier for producers to adjust their output in response to price changes, thus increasing the price elasticity of supply. Similarly, a longer time since a price change allows producers more time to adjust their production processes and capacities, also increasing the price elasticity of supply.
Learning Objectives
- Comprehend the principle of price elasticity of supply and its influencing factors.