Question

The price elasticity of supply is affected by

A. whether the good produced has close substitutes available.

B. the passage of time.

C. whether the good produced is a luxury or a necessity.

D. the definition of the market.

E. the share of the good in consumer budgets.

Answer 1

Answer:

B. the passage of time. 

Explanation:

Price elasticity of supply measures how sensitive quantity supplied are to changes in price.

Price elasticity of supply is determined by the passage of time.

Typically, in the short run, the elasticity of supply is usually inelastic. Prices do not usually impact quantity supplied because in the short run, some of the factors of production are fixed. But in the long run, the price elasticity of supply are more elastic.

The other factors listed above in the options affect the price elasticity of demand.