Recall the Application about the short-run and long-run elasticity of supply of coffee to answer the following question(s).
-Recall the Application. If the price of coffee beans increases by 20 percent and stays there for a year, the quantity of coffee supplied will ________ by a relatively ________ amount.
A) increase; large
B) increase; small
C) decrease; large
D) decrease; small

Question

Quizplus · Accepted Answer

In the short run, the elasticity of supply for coffee is relatively inelastic due to factors such as the time it takes for coffee plants to grow and produce beans. Therefore, even if the price of coffee beans increases by 20 percent and stays there for a year, the quantity of coffee supplied will increase but by a relatively small amount because producers cannot quickly adjust their production levels.

Recall the Application About the Short-Run and Long-Run Elasticity of Supply