When a supply curve is relatively flat, the
A) sellers are not at all responsive to a change in price.
B) equilibrium price changes substantially when the demand for the good changes.
C) supply is relatively elastic.
D) supply is relatively inelastid.

Question

Quizplus · Accepted Answer

A flat supply curve means that a small change in price results in a relatively large change in the quantity supplied. This indicates that the sellers are responsive to changes in price and that supply is relatively elastic. On the other hand, option A is incorrect because a steep supply curve would indicate that sellers are not responsive to changes in price. Option B is also incorrect because equilibrium price only changes substantially when either demand or supply are highly responsive to changes in price, which is not the case with a flat supply curve. Option D is incorrect because a flat supply curve indicates that supply is relatively elastic, which means that a change in price results in a proportionally greater change in quantity supplied.

When a Supply Curve Is Relatively Flat, the