If price changes by 1% and supply changes by 2%, then supply is

1.	If price changes by 1% and supply changes by 2%, then supply is
Answer» Elastic If price changes by 1% and supply changes by 2%, then supply is Elastic. The Price ELASTICITY of Supply (PES) for elastic and inelastic supply WOULD be different. The PES for elastic supply would be greater than 1. This tells US that if prices were to increase (or decrease) by 1%, the quantity SUPPLIED would increase (or decrease) in a number greater than 1%.

Answer»

Elastic

If price changes by 1% and supply changes by 2%, then supply is Elastic. The Price ELASTICITY of Supply (PES) for elastic and inelastic supply WOULD be different. The PES for elastic supply would be greater than 1. This tells US that if prices were to increase (or decrease) by 1%, the quantity SUPPLIED would increase (or decrease) in a number greater than 1%.

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If price changes by 1% and supply changes by 2%, then supply is

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