The supply of product X is inelastic (but not perfectly inelastic)if the price of X rises by
A)4 percent and quantity supplied rises by 6 percent.
B)7 percent and quantity supplied rises by 7 percent.
C)12 percent and quantity supplied remains the same.
D)5 percent and quantity supplied rises by 2 percent.

Question

Quizplus · Accepted Answer

The supply of a product is considered inelastic when the percentage change in quantity supplied is less than the percentage change in price, which is the case in option D (5% price increase leads to only a 2% increase in quantity supplied).

The Supply of Product X Is Inelastic (But Not Perfectly