A key determinant of the price elasticity of supply is
A)the ability of sellers to change the price of the good they produce.
B)the ability of sellers to change the amount of the good they produce.
C)how responsive buyers are to changes in sellers' prices.
D)the slope of the demand curve.

Question

Quizplus · Accepted Answer

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in the price of a good. One key determinant of this responsiveness is the ability of sellers to change the amount of the good they produce. If sellers can easily increase production in response to a price increase, then the supply is considered elastic. If sellers are unable to increase production, then the supply is considered inelastic. Therefore, option B is the correct answer.

A Key Determinant of the Price Elasticity of Supply Is