Which statement is true?
A)The supply curve in the market period is always perfectly inelastic.
B)The supply curve for a perishable good,such as ripe strawberries,is perfectly elastic.
C)Business firms cannot respond to increases in demand for their product in the short run.
D)The long-run supply curve is more elastic than the short-run supply curve.

Question

Quizplus · Accepted Answer

In the long run, businesses have more flexibility to adjust their production levels and inputs, making their supply more elastic. In the short run, they may be limited by fixed inputs and inventory, resulting in a less elastic supply. Therefore, the long-run supply curve is more elastic than the short-run supply curve. A is incorrect because the supply curve in the market period can be perfectly elastic if producers have no time to adjust their output. B is incorrect because ripe strawberries have a short shelf life and cannot be stored, leading to an inelastic supply curve. C is incorrect because firms can respond to increases in demand in the short run by increasing prices, hiring more labor, and using overtime to increase output.

Which Statement Is True