Question

Supply is more responsive to price in the long period compared to the short period. Why?

Answer 1

In the long period, all factors of production are variable, whereas in the short period, some factors remain fixed while others are variable. As a result, supply in the long run can be increased by using more of all factors, but in the short run, it can only be increased by using additional variable factors.

Hence, supply can expand to a much greater extent in the long period than in the short period, making it more sensitive or responsive to price changes over the long term.