As the time frame shifts from the short run to the long run,what happens to producers who are subject to a binding price floor?
A) They are increasingly willing to substitute away from producing the good,and the supply curve becomes less elastic.
B) There are no changes,and their elasticity of supply remains unchanged.
C) They are increasingly willing to substitute away from producing the good,and the supply curve becomes more elastic.
D) They are less willing to substitute away from producing the good,and the supply curve becomes less elastic.
E) They are less willing to substitute away from the good,and the supply curve becomes more elastic.

Question

Quizplus · Accepted Answer

In the long run, producers have more time to adjust their production processes and resources, making it easier for them to substitute away from producing a good that is subject to a binding price floor. This increased flexibility leads to a more elastic supply curve, as producers can more readily respond to price changes by adjusting the quantity supplied.

As the Time Frame Shifts from the Short Run to the Long