Ceteris paribus, if a 4% increase in price leads to a 6% increase in the quantity supplied, then:
A)supply is elastic.
B)supply is unit elastic.
C)supply is inelastic.
D)the supply curve is perfectly vertical.
E)the supply curve is perfectly horizontal.

Question

Quizplus · Accepted Answer

The fact that a small increase in price (4%) causes a larger increase in quantity supplied (6%) suggests that the supply curve is relatively responsive to changes in price. This is characteristic of an elastic supply curve.

Ceteris Paribus, If a 4% Increase in Price Leads to a 6