You are told that a 5 percent increase in the price of a good increases the quantity supplied by 10 percent after one month.Supply of this good is ________.This good is most likely produced using productive resources that are ________.
A)inelastic;plentiful or easily obtained
B)decreasing;unique or rare
C)elastic;plentiful or easily obtained
D)unit elastic;unique or rare
E)elastic;unique or rare

Question

Quizplus · Accepted Answer

The fact that a 5% increase in price leads to a 10% increase in quantity supplied indicates that the supply is elastic. This means that the producers are able to increase their quantity supplied easily in response to a change in price. Additionally, the use of plentiful or easily obtained productive resources would also suggest that supply is elastic. Therefore, choice C is the best answer.

You Are Told That a 5 Percent Increase in the Price