Price Elasticity of Supply Quiz

What does PES stand for?

• Price Elasticity of Stock

• Price Elasticity of Sales

• Price Elasticity of Supply

• Price Elasticity of Service

What does the price elasticity of supply measure?

• Cost of production

• Responsiveness of supply to a change in price

• Demand for a product

• Market competition

If the percentage change in supply is greater than the percentage change in price, then supply is:

• Perfectly elastic

• Price inelastic

• Perfectly inelastic

• Price elastic

What does a figure for the price elasticity of supply greater than 1 indicate?

• Price inelastic supply

• Price elastic supply

• Perfectly elastic supply

• Perfectly inelastic supply

Which factor affects the elasticity of supply by making it more elastic?

• Short production period in agriculture

• Difficulty in transferring economic resources into the industry

• Limited spare capacity in the industry

• Longer time period for firms to invest in factors of production

In which industry is supply usually more elastic due to the ease of increasing production?

• Healthcare

• Technology

• Manufacturing

• Agriculture

What does the supply curve Ss represent?

• Perfectly elastic supply

• Supply in the long run

• Supply in the short run

• Perfectly inelastic supply

What situation represents perfectly inelastic supply?

• Firms willing to supply any amount of the product at a given price

• Agricultural products taking years to bring to the market

• Resources available for firms to increase supply

• Increased output in response to a price increase

What does a situation of perfectly elastic supply indicate?

• Firms unable to increase supply no matter how much price increases

• Firms willing to supply any amount of the product at a given price

• Agricultural products taking years to bring to the market

• Increased output in response to a price increase

What does the relationship between the price elasticity of supply and the time period indicate?

• Supply tends to be relatively elastic in the short run

• Supply tends to be relatively elastic in the long run

• Supply tends to be relatively inelastic in the short run

• Supply tends to be relatively inelastic in the long run