If a 1 percent increase in price leads to a 0.7 percent increase in quantity supplied,the short-run supply curve is
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly inelastic.

Question

Quizplus · Accepted Answer

The short-run supply curve is inelastic because the percentage change in quantity supplied is less than the percentage change in price. Specifically, a 1 percent increase in price leads to only a 0.7 percent increase in quantity supplied, indicating that suppliers are not very responsive to changes in price in the short run.

If a 1 Percent Increase in Price Leads to a 0.7