If a 1 percent increase in price leads to a .7 percent increase in quantity supplied,the short-run supply curve is:
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly inelastic.

Question

Quizplus · Accepted Answer

The supply curve is considered inelastic when the percentage change in quantity supplied is less than the percentage change in price, which is the case here (.7% increase in quantity supplied for a 1% increase in price).

If a 1 Percent Increase in Price Leads to a .7