When a 9 percent increase in price leads to a 6 percent increase in quantity supplied, the supply is relatively inelastic.

Question

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Supply elasticity is measured by the percentage change in quantity supplied divided by the percentage change in price. If the percentage increase in quantity supplied (6%) is less than the percentage increase in price (9%), the supply is considered relatively inelastic.

When a 9 Percent Increase in Price Leads to a 6