Which of the following determines the elasticity of supply?

Length of time

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Behaviour of cost of production

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Nature of commodity produced

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Risk aversion

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Solution

The correct option is D
Risk aversion

The elasticity of supply is determined by the willingness of entrepreneurs to take risk. If entrepreneurs are willing to take risk, the supply will be more elastic.

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Q17. Consider the following statements about Commodity market:

1. It is the market where a wide range of products are traded

2. This would help investors hedge their commodity risk.

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X

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