Decreases in input costs and a longer time since a price change will tend to:
A)increase the price elasticity of supply.
B)decrease price elasticity of supply.
C)have no impact on the price elasticity of supply.
D)increase price elasticity of supply with decreases in input costs but decrease price elasticity of supply with length of time.

Question

Quizplus · Accepted Answer

Decreases in input costs can make it easier for producers to adjust their output in response to price changes, thus increasing the price elasticity of supply. Similarly, a longer time since a price change allows producers more time to adjust their production processes and capacities, also increasing the price elasticity of supply.

Decreases in Input Costs and a Longer Time Since a Price