The supply curve for gasoline will be more elastic in
A) the short run because of the principle of diminishing returns.
B) the long run because of the principle of diminishing returns.
C) the short run because firms have more time in which to respond to the price change.
D) the long run because firms have more time in which to respond to the price change.

Question

Quizplus · Accepted Answer

In the long run, firms have more time to adjust their production and investment decisions to changes in price, making the supply curve more elastic. In the short run, production capacity is fixed, so the supply curve is more inelastic.

The Supply Curve for Gasoline Will Be More Elastic in