Supply is very elastic when
A)The quantity supplied does not change much when price rises.
B)The quantity supplied has a large increase in response to an increase in price.
C)The quantity supply does not respond to an increase in price.

Question

Quizplus · Accepted Answer

When the quantity supplied has a large increase in response to an increase in price, it indicates that there are many suppliers who are willing and able to enter the market and provide additional units of the product at the higher price. This responsiveness of quantity supplied to price changes is what defines elastic supply.

Supply Is Very Elastic When