FIGURE 5-4
-Refer to Figure 5-4. The difference between supply curve S1 and supply curve S2 in this market for apartments is that
A) S1 is not affected by a government controlled rental price.
B) S2 is not affected by a government controlled rental price.
C) S1 is more elastic than S2.
D) S1 is a short-run supply curve and S2 is a long-run supply curve.
E) S1 is a long-run supply curve and S2 is a short-run supply curve.

Question

FIGURE 5-4
-Refer to Figure 5-4. The difference between supply curve S1 and supply curve S2 in this market for apartments is that
A) S1 is not affected by a government controlled rental price. 
B) S2 is not affected by a government controlled rental price. 
C) S1 is more elastic than S2. 
D) S1 is a short-run supply curve and S2 is a long-run supply curve. 
E) S1 is a long-run supply curve and S2 is a short-run supply curve.

Quizplus · Accepted Answer

In economics, short-run supply curves are typically less elastic than long-run supply curves because, in the long run, firms can adjust all inputs and enter or exit the market. Therefore, S1 being a short-run supply curve and S2 being a long-run supply curve explains the difference between them.

FIGURE 5-4 -Refer to Figure 5-4. the Difference Between Supply Curve S1