An increase in the price of T-shirts from $20 to $25 causes an increase in the quantity supplied of T-shirts from 12,000 to 14,000.Then:
A) The demand is elastic
B) The demand is inelastic
C) The supply is elastic
D) The supply is inelastic
E) The supply is unit elastic

Question

Quizplus · Accepted Answer

The increase in price has led to an increase in the quantity supplied, which suggests that supply is responsive to changes in price. This is an indication of elastic supply. Therefore, the best choice is D.

An Increase in the Price of T-Shirts from $20 to $25