A microchip manufacturing plant is likely to have a ______________ price elasticity of supply than a bread bakery due to _________________.
A)more elastic;a more flexible production process
B)more elastic;greater availability of inputs
C)less elastic;a less flexible production process
D)more elastic;less availability of inputs

Question

Quizplus · Accepted Answer

A microchip manufacturing plant is likely to have a less elastic price elasticity of supply than a bread bakery due to a less flexible production process. The production process for microchips is complex and requires specialized inputs, so it is more difficult for the plant to quickly adjust its output in response to price changes in the market. In contrast, a bread bakery can more easily adjust its production levels because its production process is simpler and requires more readily available inputs.

A Microchip Manufacturing Plant Is Likely to Have a ______________