For a price increase from $100 to $110, supply is the most elastic when quantity supplied:
A) increases from 20 to 30.
B) increases from 20 to 40.
C) does not change.
D) increases from 20 to 22.

Question

Quizplus · Accepted Answer

When the price increases from $100 to $110, if the quantity supplied increases from 20 to 40, it indicates that the supply is very responsive to changes in the price. Hence, the supply is the most elastic in this scenario. A and D are incorrect because an increase in quantity from 20 to 30 or 22 indicates a lesser response to the change in price. The option C is also incorrect because elasticity requires a change in quantity supplied in response to a change in price. If quantity supplied does not change, it indicates perfect inelasticity.

For a Price Increase from $100 to $110, Supply Is