If a 5 percent increase in price causes a 10 percent increase in quantity supplied, then supply is
A) elastic.
B) inelastic.
C) unit elastic.
D) infinite.

Question

Quizplus · Accepted Answer

When a small change in price leads to a significant change in the quantity supplied, we can say that supply is elastic. In this case, a 5 percent increase in price causes a 10 percent increase in quantity supplied, which means the percentage change in quantity supplied is greater than the percentage change in price. Hence, supply is elastic.

If a 5 Percent Increase in Price Causes a 10