A key determinant of the price elasticity of supply is
A)the length of the time period.
B)the definition of the market.
C)the number of close substitutes for the good in question.
D)the extent to which buyers alter their quantities demanded in response to changes in their incomes.

Question

Quizplus · Accepted Answer

The length of the time period is a key determinant of the price elasticity of supply because producers often need time to adjust their production levels in response to price changes. In the short run, producers may not have the ability to adjust their production levels, so the price elasticity of supply may be low. In the long run, producers can allocate resources more efficiently and adjust their production levels, so the price elasticity of supply may be higher.

A Key Determinant of the Price Elasticity of Supply Is