If the price elasticity of supply for a good is 10,then supply is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly elastic.
E) perfectly inelastic.

Question

Quizplus · Accepted Answer

The price elasticity of supply is defined as the percentage change in quantity supplied of a good or service resulting from a 1 percent change in its price, all other factors being constant. If the price elasticity of supply is greater than 1, then supply is said to be elastic, meaning that a change in price leads to a proportionally larger change in quantity supplied. In this case, since the elasticity is 10, supply is highly responsive to price changes, and hence elastic.

If the Price Elasticity of Supply for a Good Is