Asked by
Samantha Poccia
on Oct 25, 2024
Verified
Generally, long-run elasticities of supply are:
A) greater than short-run elasticities, because existing inventories can be exploited during shortages.
B) greater than short-run elasticities, because consumers have time to find substitutes for the good.
C) greater than short-run elasticities, because firms can make alterations to plant size and input combinations to be more flexible in production.
D) smaller than short-run elasticities, because the firm has made long-term commitments it cannot easily modify.
E) the same as short-run elasticities, because technology is not assumed to change in the long-run adjustment process.
Long-run Elasticities
Measure of responsiveness of demand or supply to changes in price or income, considered over a period long enough for all adjustments to be made.
Short-run Elasticities
Measures of how responsive the quantity demanded or supplied of a good is to a price change over a short period.
Plant Size
The scale or capacity of a factory or production facility, which can influence its efficiency and ability to meet demand.
- Acquire knowledge about the elasticity concept in supply and demand, and understand its impact on market modifications.
Verified Answer
DM
Learning Objectives
- Acquire knowledge about the elasticity concept in supply and demand, and understand its impact on market modifications.