Asked by
Lindsay Garcia
on Dec 12, 2024
Verified
Relative to a mobile factor of production, economic theory suggests that the price elasticity of supply for a highly immobile factor of production (for example, land) will be
A) more elastic.
B) less elastic.
C) of unitary elasticity.
D) this is a trick question; the price elasticity of supply for factors of production is not affected by factor mobility.
Price Elasticity Of Supply
The percentage change in quantity supplied, divided by the percentage change in the price that caused the change in quantity supplied.
Immobile Factor
Refers to a factor of production that cannot easily be moved from one place to another, such as land or a fixed installation.
- Discern the variations in short-term and long-term supply elasticity across multiple resources.
- Recognize the significance of mobility in factors on the elasticity of resources' supply.
Verified Answer
LM
Learning Objectives
- Discern the variations in short-term and long-term supply elasticity across multiple resources.
- Recognize the significance of mobility in factors on the elasticity of resources' supply.