If the percentage change in the price of a good exceeds the percentage change in the quantity supplied, then the supply is
A) inelastic.
B) perfectly elastic.
C) elastic.
D) unit elastic.
E) perfectly inelastic.

Question

Quizplus · Accepted Answer

When the percentage change in price of a good exceeds the percentage change in quantity supplied, it indicates that the quantity supplied is not very responsive to changes in the price. This is the characteristic of an inelastic supply. Therefore, the best choice is A) inelastic.

If the Percentage Change in the Price of a Good