How Do Producers Who Are Subject to a Binding Price

question 124

Multiple Choice

How do producers who are subject to a binding price ceiling respond as the time frame shifts from the short run to the long run?

• A) Producers are increasingly willing to substitute away from producing the good,and their elasticity of supply becomes less elastic.
• B) There are no changes,and elasticity of supply remains unchanged.
• C) Producers are increasingly willing to substitute away from producing the good,and their elasticity of supply becomes more elastic.
• D) Producers are less willing to substitute away from producing the good,and their elasticity of supply becomes less elastic.
• E) Producers are less willing to substitute away from the good,and their elasticity of supply becomes more elastic.

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