If sellers respond substantially to changes in the price, then:
A)sellers are considered to be relatively price sensitive
B)sellers are considered to be relatively price insensitive
C)the supply curve will shift substantially when the price rises
D)the price elasticity of supply equals one

Question

Quizplus · Accepted Answer

If sellers respond substantially to changes in the price, it means that they are sensitive to price changes, and therefore, they are considered to be relatively price sensitive. This indicates a relatively elastic supply curve, where a small change in price results in a relatively larger change in the quantity supplied.

If Sellers Respond Substantially to Changes in the Price, Then