The price elasticity of supply measures:
A) the response of a supply shift to changes in technology.
B) how much supply changes when the prices of inputs change.
C) the responsiveness of quantity supplied to changes in prices.
D) all of the above.

Question

Quizplus · Accepted Answer

The price elasticity of supply measures the responsiveness of quantity supplied to changes in prices. This means that it shows how much the quantity supplied changes when there is a change in price. Option A is incorrect because the response of a supply shift to changes in technology is not directly related to price elasticity of supply. Option B is incorrect because it describes the elasticity of input supply, not output supply.

The Price Elasticity of Supply Measures