Elasticity of Supply

What does the elasticity of supply for the firm represent?

• the need to increase production because of a successful advertising campaign

• the possibility of switching production from other goods the firm makes to televisions

• the speed at which additional fixed factors used to produce televisions can be obtained

• the way the firm's production changes as a result of a change in price of televisions

Which statement describes the price elasticity of supply along this curve?

• It diminishes as quantity increases.

• It is constant and greater than unity at all quantities.

• It is constant and less than unity at all quantities.

• It increases as quantity increases.

A supply curve is represented by the equation, quantity supplied = 10 + 5P, where P = the price of the product. Which price rise would cause the quantity supplied to double?

• $1 to $2

• $1 to $3

• $1 to $4

• $1 to $5

Which statement about the price elasticities of the curves is correct?

• Curve 1 has constant infinite elasticity.

• Curve 2 has elasticity greater than curve 4 over its whole length.

• Curve 3 has increasing elasticity as price rises.

• Curve 4 has decreasing elasticity as price rises.

Which price rise would cause the quantity supplied to double?

• $1 to $2

• $1 to $3

• $1 to $4

• $1 to $5

A product has a high price elasticity of supply. What might explain this?

• The product has a high opportunity cost.

• The product has a non-perishable nature.

• The product is classed as an inferior good.

• The product is considered to be luxury

The price elasticity of supply of a good is +2. The quantity supplied originally was 200 units. The price increases by 30%. What will be the quantity supplied be after the price increase?

• 80 units

• 140 units

• 260 units

• 320 units

For which supply curve is the value of price elasticity of supply not the same at all points on the curve?

• S₁

• S₂

• S3

• S4

Which statement about price elasticity of supply is correct?

• It cannot change in the short run.

• It increases as the time period lengthens.

• It is infinite in the momentary time period.

• It is zero in the long run

The diagrams show the supply curves in four different markets. In which market is the price elasticity of supply always equal to one?

• A

• C

• B

• D