Question

Suppose the price elasticity of supply for a good is 2.0. This means... The supply of this good is elastic. Inputs used to produce this good are probably rare and/or expensive. The supply of this good is inelastic. Inputs used to produce this good are probably rare and/or expensive. The supply of this good is elastic, Inputs used to produce this good are probably cheap and/or plentiful. The supply of this good is inelastic. Inputs used to produce this good are probably cheap and/or plentiful Question 9 10 pts At the bottom of a demand curve (where price is low and quantity is high) demand is likely to be more elastic. True False

Answer 1

1) C. When elasticity of supply is 2, it means supply is elastic and inputs used to produce these goods are cheaper and plenty because supply can be changed easily according to price.

9)False. At the bottom of the demand curve, demand is likely to be inelastic because Ed=dQ/dP*P/Q

As we move down along a linear demand curve, Price decreases and quantity increases Leading lower elasticity of demand. Thus demand is inelastic