Because suppliers can more readily adjust their output in the long run than in the short run, we expect price elasticity of supply to be
A) negative in the long run and positive in the short run
B) positive in the long run and negative in the short run
C) greater than one in the short run and less than one in the long run
D) higher in the long run than in the short run
E) higher in the short run than in the long run

Question

Quizplus · Accepted Answer

In the long run, suppliers have more time and flexibility to adjust their production levels in response to price changes, making the price elasticity of supply higher compared to the short run where adjustments are more limited.

Because Suppliers Can More Readily Adjust Their Output in the Long