If the owner of Sally's Salty Treats finds that, in the long run, she can trade one type of input for another, the price elasticity of supply is:
A) relatively elastic.
B) relatively inelastic.
C) perfectly elastic.
D) perfectly inelastic.
E) unitary elastic.

Question

Quizplus · Accepted Answer

If the owner of Sally's Salty Treats can easily switch between using different types of inputs, then she has a high degree of flexibility in her production process. This means that a change in the price of one input will not greatly affect her ability to produce the product, as she can simply switch to using a different input. Thus, the price elasticity of supply for her business is relatively elastic.

If the Owner of Sally's Salty Treats Finds That, in the Long