If the estimated elasticity of supply coefficient equals 0.85, then:
A)the supply curve is vertical.
B)the demand curve is horizontal.
C)supply is unit elastic.
D)supply is relatively elastic.
E)supply is relatively inelastic.

Question

Quizplus · Accepted Answer

An elasticity of supply coefficient of 0.85 indicates that the supply is relatively inelastic, meaning that a change in price will result in a proportionally smaller change in quantity supplied.

If the Estimated Elasticity of Supply Coefficient Equals 0