If the price of beef increased by 20 per cent and the quantity supplied increased by 10 per cent, then the supply of beef is
A) perfectly inelastic.
B) elastic.
C) perfectly elastic.
D) unit elastic.
E) inelastic.

Question

Quizplus · Accepted Answer

If the quantity supplied increases by only 10% in response to a larger increase in price (20%), we can infer that the supply of beef is relatively inelastic. Inelastic supply means that producers are not very responsive to changes in price, typically because it is difficult or slow to adjust production levels in the short run.

If the Price of Beef Increased by 20 Per Cent