Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Supply becomes more elastic over time as producers adjust their production levels.
B
Supply remains perfectly inelastic regardless of the time period.
C
Supply becomes less elastic over time due to market saturation.
D
Supply responsiveness is unaffected by time.
Understanding the Answer
Let's break down why this is correct
Answer
The length of time can greatly affect the price elasticity of supply, which is how quickly and easily producers can change the amount they supply when prices change. In the short term, suppliers may not be able to adjust their production quickly because they have fixed resources, like machinery or labor, so the supply is inelastic. However, over a longer period, producers can invest in new resources, hire more workers, or find ways to improve efficiency, making the supply more elastic. For example, if the price of oranges rises suddenly, farmers might not be able to grow more oranges right away, but after a year, they could plant more trees to increase their supply. Thus, the longer the time frame, the more flexible producers become in responding to price changes.
Detailed Explanation
Over time, producers can change how much they make. Other options are incorrect because Some might think that supply never changes, no matter what; It's a common mistake to think that supply gets less flexible over time.
Key Concepts
Impact of time on supply elasticity
Price changes and supply response.
Topic
Price Elasticity of Supply
Difficulty
medium level question
Cognitive Level
understand
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