The slope of the excess supply curve is more elastic than the slope of the domestic supply curve

Economics Dec 09, 2020

The slope of the excess supply curve is more elastic than the slope of the domestic supply curve.

a. True

b. False

Expert Solution

The given statement is not true that is it is false, excess supply is a situation when there is more supply in the economy compared to its demand. For this reason there will be a little influence on price, price will not react much according to the amount of supply. So the excess supply curve will not be much elastic. On the other hand the slope of domestic supply curve is more elastic because price is influenced more by the amount of supply in the market.

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