Advertisements
Advertisements
Question
Explain briefly the impact of the cost of production on the elasticity of supply.
Solution
If the cost of production increases, then there is an adverse impact on supply. If the cost of production increases, then the supply does not change with the change in price and the supply of such a commodity will be perfectly inelastic.
APPEARS IN
RELATED QUESTIONS
If price elasticity of supply is greater than 1, then supply is said be elastic.
- Price elasticity of supply of a good is 0.8, its supply is said to be inelastic.
- If the quantity supplied of a commodity remain the same whatever its price supply is said to perfectly inelastic.
Elasticity of supply is measured by:
When the percentage change in the quantity supplied of a commodity is exactly equal to the percentage change in its price it is known as ______.
Which of the following measures of price elasticity shows inelastic supply?
When is the supply of a commodity is called elastic?
Draw the supply curve showing price elasticity of supply equal to one.
Indicate the degree of elasticity on the supply curve given below:
Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4.
Define a relatively inelastic supply.
