If the quantity supplied of walkie-talkies increases by 5 percent when prices increase by 12 percent, then
A) the supply of walkie-talkies is inelastic.
B) the supply of walkie-talkies is elastic.
C) the walkie-talkie supply curve will shift to the right.
D) the walkie-talkie supply curve will shift to the left.

Question

Quizplus · Accepted Answer

The supply is inelastic because the percentage change in quantity supplied (5%) is less than the percentage change in price (12%).

If the Quantity Supplied of Walkie-Talkies Increases by 5 Percent