Which of the following statements best describes the relationship between short-run supply elasticity and long-run supply elasticity?
A)For many products, long-run supply is likely to be more price elastic than short-run supply.
B)For products that can be recycled, long-run supply is likely to be more price elastic than short-run supply.
C)For many products, long-run supply is likely to be less price elastic than short-run supply.
D)None of the above

Question

Quizplus · Accepted Answer

In the short run, firms may have limited ability to adjust production levels in response to price changes, so short-run supply tends to be less elastic. However, in the long run, firms have more flexibility to adjust their production capacity, so long-run supply is likely to be more elastic. Therefore, choice A is the best statement. In the short-run, firms have limited time to adjust their production and may not be able to change their inputs or production processes easily. Therefore, short-run supply is likely to be less elastic than long-run supply. In the long-run, firms have more time to adjust their production process and can change their inputs, production methods, and may even enter or exit the market. Therefore, long-run supply is likely to be more elastic than short-run supply.

Which of the Following Statements Best Describes the Relationship Between