Recall the Application about the short-run and long-run elasticity of supply of coffee to answer the following question(s).
-Recall the Application.If the price of coffee beans decreases by 12 percent and stays there for a year,the quantity of coffee supplied will ________ by a relatively ________ amount.
A) increase; large
B) increase; small
C) decrease; large
D) decrease; small

Question

Quizplus · Accepted Answer

In the short run, the quantity of coffee supplied is relatively inelastic because producers cannot quickly adjust their production levels. Therefore, a decrease in the price of coffee beans will lead to a decrease in the quantity of coffee supplied, but the amount of the decrease will be relatively small due to the inelastic nature of supply in the short run.

Recall the Application About the Short-Run and Long-Run Elasticity of Supply