Advertisements
Advertisements
Question
If price elasticity of supply is greater than 1, then supply is said be elastic.
Options
True
False
Advertisements
Solution
This statement is True.
Explanation:
When the price elasticity of supply is greater than 1, the percentage change in quantity supplied is greater than the percentage change in price. This indicates that supply is elastic, meaning producers are highly responsive to price changes.
APPEARS IN
RELATED QUESTIONS
Explain briefly the impact of the cost of production on the elasticity of supply.
Draw a perfectly inelastic supply curve.
Draw a perfectly elastic supply curve.
Define a relatively elastic supply.
Identify the degree of elasticity of supply from the following graph:
Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I:
| Column I | Column II |
| A. Perfectly Inelastic | (i) Es > 1 |
| B. Perfectly Elastic | (ii) Es < 1 |
| C. Inelastic | (iii) Es = 0 |
| D. Highly Elastic | (iv) Es = infinity |
Choose the correct alternative:
Which of the following measures of price elasticity shows inelastic supply?
Price of a product increases by 2%. As a result, its supply rises by 4%. What is elasticity of supply of the commodity?
The coefficient of elasticity of a commodity is 0.4. What percentage change in supply will take place if its price rises 20%?
With the help of a formula calculate the elasticity of supply from the following table:
| Price | Quantity supplied |
| 10 | 200 |
| 15 | 225 |
When there is no change in price, but quality supplied changes, it implies a situation of ______.
Give the meaning of perfectly inelastic supply.
Define price elasticity of supply.
Draw the supply curve showing price elasticity of supply greater than one.
Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4.
Using graphs, explain any four types of elasticity of supply.
If the price of a commodity falls by 10% and consequently, the quantity supplied decreases by 20%, what will be its elasticity of supply?
Price elasticity of supply of a good is 0.8. Is the supply 'elastic' or 'inelastic', and why?
Explain the percentage method of measuring price elasticity of supply.
