In the elastic portion of the supply,small changes in prices lead to ________ changes in quantity,while in the inelastic portion of the supply curve,small changes in prices lead to ________ changes in quantity.
A) small; small
B) large; large
C) small; large
D) large; small

Question

Quizplus · Accepted Answer

In the elastic portion of the supply, producers are very sensitive to price changes and will adjust their quantity supplied significantly in response to small price changes. Therefore, small changes in prices lead to large changes in the quantity supplied, hence D is the correct answer. On the other hand, in the inelastic portion of the supply curve, producers are not very responsive to price changes, so small changes in prices lead to small changes in the quantity supplied.

In the Elastic Portion of the Supply,small Changes in Prices