If the price of timber increased by 10 per cent and the quantity supplied increased by 20 per cent. Then the supply of timber is
A) perfectly elastic.
B) elastic.
C) inelastic.
D) unit elastic.
E) perfectly inelastic.

Question

Quizplus · Accepted Answer

When the price of timber increased by 10 per cent and the quantity supplied increased by 20 per cent, it indicates that the supply is price elastic. This is because a small increase in price led to a relatively larger increase in the quantity supplied. Therefore, the suppliers are responsive to changes in price, and hence the supply is elastic.

If the Price of Timber Increased by 10 Per Cent