If the supply of a good is very elastic, then any increase in demand for the good will have a:
A) big impact on the price of the good.
B) very small impact on the price of the good.
C) very small impact on the equilibrium quantity exchanged.
D) limiting effect on the quantity sold.

Question

Quizplus · Accepted Answer

When the supply of a good is very elastic, it means that the producers can easily increase the quantity supplied in response to any increase in demand. Therefore, there will be a minimal impact on the price of the good, as the producers will be able to meet the increased demand without necessarily raising the price. However, the equilibrium quantity exchanged may increase significantly due to the easily adjusted supply.

If the Supply of a Good Is Very Elastic, Then