The price elasticity of supply is always a positive value because
i.there is a direct relationship between the price and the quantity supplied.
ii.as the equilibrium price increases,the equilibrium quantity also always increases.
iii.buyers are willing to pay a higher price for larger quantities.
A) i only
B) ii only
C) iii only
D) i and ii
E) ii and iii

Question

Quizplus · Accepted Answer

The price elasticity of supply is always positive because it reflects the direct relationship between price and quantity supplied: as prices increase, suppliers are willing to supply more, and as prices decrease, they supply less. This is captured in choice i. Choices ii and iii are incorrect because ii is a misunderstanding of market equilibrium dynamics (supply elasticity is about suppliers' responses, not the automatic outcome of market equilibrium), and iii relates to demand, not supply.

The Price Elasticity of Supply Is Always a Positive Value