Which of These Is a Determinant of Price Elasticity of Supply

question 9

Multiple Choice

Which of these is a determinant of price elasticity of supply?

• A) substitutability
• B) the amount of income spent on the good
• C) the time it takes to change plant capacity, and the number of firms in the industry
• D) resource costs associated with the good

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Definitions:

Complementary Resource

A good or service that enhances the value or performance of another primary product or service.

Profit-maximizing Firm

A company that adjusts its production and sales strategies to achieve the highest possible profit, considering its costs and market demand.

Substitution Effect

This effect describes the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute more expensive items with cheaper ones.

Output Effect

The impact on total output or production resulting from changes in the price level or other economic factors.