One determinant of the price elasticity of supply is _____
A)the price elasticity of demand.
B)how rapidly costs increase when a firm increases its output.
C)whether the production process relies heavily on capital or on labor.
D)the number and closeness of available substitutes.
E)whether the product is a normal good or an inferior good.

Question

Quizplus · Accepted Answer

If the costs increase rapidly when a firm increases its output, it will be harder for the firm to respond to price changes by increasing its supply, making the supply less elastic.

One Determinant of the Price Elasticity of Supply Is _____