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Match the commodities given below with the diagram. Justify your answer. |
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Answer» a. Mobile Phone b. Coconut The supply of mobile phones are relatively price elastic. This is because the purchase of mobile phones can easily react to a change in price. It is a manufactured good. All the raw materials needed to produce a mobile phone can easily be available. The producers can pile up stock and when price increases they can increase the supply. The supply of coconut can be price inelastic. This is because the producers cannot easily react to a change in the price of coconut. Years needed for a coconut tree to get mature and start to produce coconuts. It is an agricultural product. The producers cannot hold the stock of coconut for a longer duration. |
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