The price elasticity of supply measures how:
A)easily labour and capital can be substituted for one another in the production process
B)responsive the quantity supplied of X is to changes in the price of X
C)responsive the quantity supplied of Y is to changes in the price of X
D)responsive quantity supplied is to a change in incomes
E)responsive the quantity supplied of X is to changes in resource prices

Question

Quizplus · Accepted Answer

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in the price of the good. It is calculated as the percentage change in quantity supplied divided by the percentage change in price. It indicates how easily producers can adjust the quantity of a good they supply in response to changes in price.

The Price Elasticity of Supply Measures How