If a given factor of production is highly mobile across alternative uses, the factorʹs supply is
A) highly price elastic.
B) highly price inelastic.
C) perfectly inelastic.
D) irrelevant to its earnings.
E) immobile at the industry level.

Question

Quizplus · Accepted Answer

If a factor of production is highly mobile across alternative uses, it means that it can be used for a variety of purposes, and thus its supply is relatively elastic. In other words, if the price of one particular use of the factor decreases, the supply of the factor can easily shift to another more profitable use. This is in contrast to a factor that is specialized and can only be used for one particular purpose, which would have a less elastic supply.

If a Given Factor of Production Is Highly Mobile Across