Ceteris paribus, if an 6% increase in quantity supplied is caused by an 8% increase in price, then:
A)supply is elastic.
B)supply is unit elastic.
C)supply is inelastic.
D)the supply curve is perfectly vertical.

Question

Ceteris paribus, if an 6% increase in quantity supplied is caused by an 8% increase in price, then:
A)​supply is elastic.
B)​supply is unit elastic.
C)​supply is inelastic.
D)​the supply curve is perfectly vertical.

Quizplus · Accepted Answer

The percentage change in quantity supplied is less than the percentage change in price, indicating that supply is relatively unresponsive to changes in price. This is characteristic of inelastic supply. Elastic supply would have a larger percentage change in quantity supplied compared to the percentage change in price. Unit elastic supply would have an equal percentage change in both quantity supplied and price. A perfectly vertical supply curve would indicate that any change in price would have no effect on quantity supplied, which is not the case here.

Ceteris Paribus, If an 6% Increase in Quantity Supplied Is