Advances in technology have changed how trees (wood) are cut down, transported and used in the manufacture of furniture, such as tables. Wood is in inelastic supply. Wood can be supplied in all economic systems. However, public goods are not supplied in a market economic system.
Define inelastic supply.
Define inelastic supply.
Quantity supplied / supply changes by a smaller percentage change than price (2).
Supply changing by less than price / PES less than 1 / PES <1 / supply unresponsive to change in price (1).
2
Allow one mark for PES =0.
The price of fish has increased from $ 3.00 to $ 4.80. The quantity supplied of fish has increased from 100 units to 130 units.
What is the price elasticity of supply (PES) of fish?
0.5
1.3
1.8
2
A
The supply of which good is likely to be most price elastic?
the good is
easily stored
time taken to
produce the good
no
one day
no
one year
yes
one day
yes
one year
C