Decreases in input costs and a longer time since a price change will tend to:
A) increase the price elasticity of supply.
B) decrease price elasticity of supply.
C) have no impact on the price elasticity of supply.
D) increase price elasticity of supply with decreases in input costs but decrease price elasticity of supply with length of time.
Answer Key

Question

Quizplus · Accepted Answer

Decreases in input costs make it easier for producers to increase production when prices rise, thus increasing the price elasticity of supply. Additionally, the longer the time since a price change, the more time producers have to adjust their production, also increasing the price elasticity of supply.

Decreases in Input Costs and a Longer Time Since a Price