If the supply of raw materials is ________, increasing their production leads to ________ per-unit costs.
A) inelastic; higher
B) perfectly elastic; higher
C) perfectly elastic; lower
D) inelastic; lower

Question

Quizplus · Accepted Answer

If the supply of raw materials is inelastic, it means that there is a limited amount of it available at a certain price level. In this case, increasing production will require additional resources and cost more per unit of raw material, resulting in higher per-unit costs.

If the Supply of Raw Materials Is ________, Increasing Their