In the short run,the price elasticity of supply is limited because of the principle of diminishing returns.

Question

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The principle of diminishing returns states that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. This means that in the short run, producers may not be able to increase their output significantly in response to a change in price, as they are already using their inputs at their optimal levels. Therefore, the price elasticity of supply is limited in the short run.

In the Short Run,the Price Elasticity of Supply Is Limited