Question

The supply is _________, when a small change in price causes a greater change in quantity supplied.

• A. relatively more elastic
• B. perfectly elastic
• C. perfectly inelastic
• D. relatively inelastic

Answer 1

Answer: (A)

relatively more elastic

A price elasticity supply is relatively elastic where the quantity supplied changes by a larger percentage than the price change.

An example would be a product that’s easy to make and distribute, such as a fidget spinner. The resources to make additional spinners are readily available and the total cost would be minimal to ramp production up or down.

Hence, the correct option is A.