11-15-2010, 01:24 AM
The require solution is :
The elasticity of supply measures the responsiveness the quantity
supplied to a change in the price of that commodity.
Because supply curves slope upwards, the elasticity of supply is
positive. As we move along a supply curve, positive price changes
are associated with positive output changes. An increase in price
causes an increase in quantity sold. The more elastic is supply the
larger the percentage increases in quantity supplied in response to a
given percentage change in price. Thus elastic supply curves are
relatively flat and inelastic supply curves relatively steep.
There are important special cases. If the supply curve is vertical, -the
quantity supplied does not change as prices changes- elasticity of
supply is zero. A horizontal supply curve has an infinitely high
elasticity of supply: A small drop in price would reduce the quantity
producers are willing to supply from an indefinitely large amount to
zero.
The elasticity of supply measures the responsiveness the quantity
supplied to a change in the price of that commodity.
Because supply curves slope upwards, the elasticity of supply is
positive. As we move along a supply curve, positive price changes
are associated with positive output changes. An increase in price
causes an increase in quantity sold. The more elastic is supply the
larger the percentage increases in quantity supplied in response to a
given percentage change in price. Thus elastic supply curves are
relatively flat and inelastic supply curves relatively steep.
There are important special cases. If the supply curve is vertical, -the
quantity supplied does not change as prices changes- elasticity of
supply is zero. A horizontal supply curve has an infinitely high
elasticity of supply: A small drop in price would reduce the quantity
producers are willing to supply from an indefinitely large amount to
zero.