Question

In the real-life example, if a shopkeeper increases supply by only 3% after a 10% rise in price, the supply is ______.

Options

• Perfectly elastic

• Unitary elastic

• Elastic

• Inelastic

Answer 1

In the real-life example, if a shopkeeper increases supply by only 3% after a 10% rise in price, the supply is Inelastic.

Explanation:

Supply is inelastic if the quantity supplied changes by less than the price change.