If the price of good X increases by 1 percent, then the quantity supplied increases by more than 1 percent. This means
A) supply is elastic.
B) supply is unit-elastic.
C) supply is inelastic.
D) the good has good substitutes.

Question

Quizplus · Accepted Answer

If a small increase in price leads to a larger increase in quantity supplied, then the supply is said to be elastic. This means that suppliers are very responsive to changes in price and are able to increase production significantly when the price increases, resulting in a relatively large increase in quantity supplied.

If the Price of Good X Increases by 1 Percent