Which of the following is a key determinant of the price elasticity of supply?
A)The slope of the supply curve
B)The availability of substitutes in production
C)The available technology
D)The time it takes to change output in response to a change in price

Question

Quizplus · Accepted Answer

The time it takes to change output in response to a change in price is a key determinant of the price elasticity of supply. If it takes a long time for producers to adjust their output in response to a change in price (i.e. if their production processes are complex or take a long time to complete), then the supply will be relatively inelastic in the short run. However, if producers can quickly adjust their output in response to changes in price (i.e. if their production processes are relatively simple or quick), then the supply will be relatively elastic in the short run.

Which of the Following Is a Key Determinant of the Price