Price Elasticity of Supply

When the price goes down, the quantity supplied will be ______.

• Positive

• fall

• Zero

• Unchanged

A 25% rise in price leads to a 40% expansion in supply. What is the coefficient of price elasticity of supply?

• 1.0

• 1.6

• 2.0

• 0.8

Seats at a Premier League stadium are an example of what type of supply?

• Elastic

• Inelastic

• Perfectly elastic

• Unit elastic

If the supply is unit price elastic, what is the value of PES?

• A) 0

• B) 1

• C) Greater than 1

• D) ∞

In the context of supply curves, what does PES stand for?

• Price Elasticity of Demand

• Price Elasticity of Supply

• Price Equilibrium Supply

• Price Equilibrium Supply

Which of the following is true for a price inelastic supply curve?

• A) Quantity supplied changes significantly with price changes.

• B) Quantity supplied changes minimally with price changes.

• C) Price changes do not affect quantity supplied.

• D) Quantity supplied is constant.

Fill in the blank: The availability of _______ can affect the price elasticity of supply.

• Stock

• Advertising

• Brand

• Location

Fill in the blank: The time it takes to adjust production levels is known as _______.

• A) Production lag

• B) Marketing time

• C) Sales period

• D) Consumer cycle

Spare capacity allows a company to respond more easily to price changes, making supply more ______.

• Inelastic

• Elastic

• Expensive

• Slow

The Law of Supply states that:

• An increase in price will cause an increase in supply

• An decrease in price will cause an increase in supply

• An increase in price will cause an decrease in supply

• An increase in price will cause a big change in price