Question

If the price of a commodity X increases by 60 per cent, but the quantity supplied increases by only 50 per cent, the supply of this commodity will be ______.

Options

• highly elastic

• elastic

• perfectly elastic

• inelastic

Answer 1

If the price of a commodity X increases by 60 per cent, but the quantity supplied increases by only 50 per cent, the supply of this commodity will be inelastic.

Explanation:

Supply is inelastic when the percentage change in quantity supplied is less than the percentage change in price. Here, the quantity supplied rises by 50%, less than the price rise of 60%.