Consider a firm's price elasticity of supply.If firms' costs rise rapidly as output increases,the
A)supply curve will tend to be flat.
B)demand curve will tend to be steep.
C)elasticity of demand will tend to be low.
D)price elasticity of supply will tend to be high.
E)price elasticity of supply will tend to be low.

Question

Quizplus · Accepted Answer

If a firm's costs rise rapidly as output increases, it becomes difficult for the firm to increase the quantity supplied in response to a change in price. This results in a low price elasticity of supply, indicating that the supply curve will tend to be inelastic or steep.

Consider a Firm's Price Elasticity of Supply