Unlike its competitors, one glass producer can use its equipment to make either windows for houses or windows for cars. Other things equal, compared to its competitors, its supply curve of windows for cars would be:
A)more elastic than the supply curves of competitors.
B)less elastic than the supply curves of competitors.
C)greater than the supply curves of competitors.
D)less than the supply curves of competitors.

Question

Unlike its competitors, one glass producer can use its equipment to make either windows for houses or windows for cars. Other things equal, compared to its competitors, its supply curve of windows for cars would be:
A)​more elastic than the supply curves of competitors.
B)​less elastic than the supply curves of competitors.
C)​greater than the supply curves of competitors.
D)​less than the supply curves of competitors.

Quizplus · Accepted Answer

A firm that can use its equipment to produce multiple types of products is likely to have a more elastic supply curve for each product compared to firms that specialize in producing only one type of product. In this case, the glass producer can easily switch between producing windows for houses and windows for cars depending on demand. Therefore, it will have a more elastic supply curve for windows for cars compared to its competitors who only produce windows for cars.

Unlike Its Competitors, One Glass Producer Can Use Its Equipment