A hotel has a capacity of 100 rooms in the short run. Which of the following statements best describes the short-run elasticity of supply for rooms at this hotel?
A) The supply is elastic at quantities above 100 rooms but inelastic at quantities below 100 rooms.
B) The elasticity of supply is equal to 1 in the short run but infinitely elastic in the long run.
C) The elasticity of supply is zero in the short run because the short-run supply curve is vertical.
D) The supply is infinitely elastic in the short run but perfectly inelastic in the long run.

Question

Quizplus · Accepted Answer

In the short run, the hotel cannot change the number of rooms available, so the supply is fixed at 100 rooms, making the supply perfectly inelastic (elasticity of supply is zero).

A Hotel Has a Capacity of 100 Rooms in the Short