The price elasticity of supply for milk in the short run has been estimated to be 0.36, while the price elasticity of supply for milk in the long run is estimated to be 0.51.That means the supply of milk is:
A) less elastic in the short run than in the long run.
B) elastic in both the short run and the long run.
C) relatively more elastic (that is, less inelastic) in the long run than in the short run.
D) relatively less elastic (that is, more inelastic) in the long run than in the short run.

Question

Quizplus · Accepted Answer

The price elasticity of supply measures the responsiveness of quantity supplied to changes in price. A higher elasticity means that quantity supplied is more responsive to changes in price. In this case, the price elasticity of supply for milk is higher in the long run (0.51) than in the short run (0.36). This means that the supply of milk is more elastic in the long run than in the short run.

The Price Elasticity of Supply for Milk in the Short