Question

What is the value of Elasticity of supply in case of Elastic supply?

A Es=0 Correct Answer Incorrect Answer
B Es=1 Correct Answer Incorrect Answer
C Es<1 Correct Answer Incorrect Answer
D Es>1 Correct Answer Incorrect Answer
E Es>2 Correct Answer Incorrect Answer

Solution

When the percentage increase in the price of a good brings about, a larger percentage increase in the supply of a good then it is said as Elastic supply. In this case Es>1. An example would be a product that’s easy to make and distribute, such as a fidget spinner. The resources to make additional spinners are readily available and the total cost would be minimal to ramp production up or down.

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