If the price elasticity of supply is 1.5,we know that supply is
A) relatively elastic.
B) relatively inelastic.
C) perfectly inelastic.
D) unitary elastic.
E) perfectly elastic.

Question

Quizplus · Accepted Answer

When the price elasticity of supply is above 1, it indicates that the changes in the quantity supplied are proportionately higher compared to the changes in price. Therefore, supply is considered relatively elastic, meaning that small changes in price lead to larger changes in quantity supplied.

If the Price Elasticity of Supply Is 1