Introduction to Economics 1 Deneme Sınavı Sorusu #1263369
Which of the following is not true about "price elasticity of supply"?
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The more easily sellers can change the quantity they produce due to availability |
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Over the short-run, the firms cannot easily change their plant size or factory size |
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The price elasticity of supply is determined by the flexibility of price to change the amount of the good or service produced in response to demand changes. |
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The higher the availability of inputs for production, the higher the elasticity of supply |
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The flexibility ofproducers depends on two important factors which are the availability of inputs to producers and the time horizon |
The price elasticity of supply is determined by the flexibility of producers/sellers to change the amount of the good or service they produce in response to price changes. The flexibility of producers depends on two important factors. These factors are the availability of inputs to producers and the time horizon. The higher the availability of inputs for production, the higher the elasticity of supply. For example, the supply of beachfront property in Istanbul Bosporus or Mediterranean coasts is harder to vary and thus less elastic than the supply of new cars or computers.
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