Asked by Mitchel Rozwadowski on Jun 01, 2024
Verified
Due to capacity constraints, the price elasticity of supply for most products is:
A) the same in the long run and the short run.
B) greater in the long run than the short run.
C) greater in the short run than in the long run.
D) too uncertain to be estimated.
Price Elasticity
The measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.
Capacity Constraints
Limitations on the maximum output a system can produce due to physical or resource-based limitations.
- Understand the concept of price elasticity of supply and how it varies between the short and long run.
Verified Answer
GG
Giselle GomezJun 07, 2024
Final Answer :
B
Explanation :
In the long run, producers have more time to adjust their production capacity and resources in response to price changes, making the price elasticity of supply greater compared to the short run where adjustments are more limited and immediate.
Learning Objectives
- Understand the concept of price elasticity of supply and how it varies between the short and long run.