The Main Determinant of Elasticity of Supply Is the

question 375

Multiple Choice

The main determinant of elasticity of supply is the

• A)number of close substitutes for the product available to consumers.
• B)amount of time the producer has to adjust inputs in response to a price change.
• C)urgency of consumer wants for the product.
• D)number of uses for the product.

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Definitions:

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, being replaced by more expensive alternatives.

Income

Income refers to the earnings received regularly from employment or investment sources.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping, indicating that as price decreases, demand increases.

Complement

A good or service that is used together with another good or service, which increases the demand for each other.