Question 1 Idads to: If the supply of a product is inelastic, this implies that a specific percentage change in price no percentage change in the quantity supplied

Accounting Oct 15, 2020

Question 1 Idads to: If the supply of a product is inelastic, this implies that a specific percentage change in price no percentage change in the quantity supplied. a smaller percentage change in the quantity supplied. a larger percentage change in the quantity supplied. an equal percentage change in the quantity supplied. A Moving to another question will save this response.

Expert Solution

There are two curves of supply - elastic and inelastic. Elastic curve suggests that a change in price leads to a more than proportional change in supply. An inelastic supply indicates that a change in price leads to a less than proportional or percentage change in supply.

We know that when price increases, supply increases. So when the supply is inelastic, then the increase in price leads to only a smaller percentage increase in supply.

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