Consider the following demand and supply curves in factor markets. FIGURE 13-4
-Refer to Figure 13-4.The panel that best illustrates the short-run supply of a factor to the economy as a whole is
A)1.
B)2.
C)3.
D)4.
E)1 or 4.

Question

Consider the following demand and supply curves in factor markets.  FIGURE 13-4
-Refer to Figure 13-4.The panel that best illustrates the short-run supply of a factor to the economy as a whole is
A)1. 
B)2. 
C)3. 
D)4. 
E)1 or 4.

Quizplus · Accepted Answer

In the short run, the supply of a factor to the economy as a whole is typically inelastic, as factors like labor and capital cannot be easily increased or decreased. Panel 3 likely represents this inelastic supply curve.

Consider the Following Demand and Supply Curves in Factor Markets