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Price elasticity of quantity supplied is positive

Economics Dec 23, 2020

Price elasticity of quantity supplied is positive. True or false. Explain.

Expert Solution

The answer is true.

Price elasticity for quantity supplied is always a positive number. Price elasticity is the percentage change in the quantity supplied divided by the difference in price. Quantity supplied is the amount of goods producers are willing to sell in the market at a particular time and period. If the price is elastic, producers will increase the items or services produced without an increase in cost. According to law of supply, quantity supplied increases with increase in price thus making price elasticity of quantity supplied positive.

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