If the measured elasticity of supply coefficient equals 1.3, then supply is:
A)perfectly elastic.
B)elastic.
C)unit elastic.
D)inelastic.
E)perfectly inelastic.

Question

Quizplus · Accepted Answer

An elasticity of supply coefficient greater than 1 indicates that the supply is elastic. This means that a change in price will result in a proportionally larger change in the quantity supplied. In this case, the elasticity of supply coefficient is 1.3, indicating that supply is elastic.

If the Measured Elasticity of Supply Coefficient Equals 1