Question

For high levels of quantity supplied where firms have reached near maximum capacity, supply becomes less elastic because firms may need to invest in additional capital in order to further increase production.

Answer 1

This statement is a TRUE statement on the topic of elasticity. In economics, elasticity is the evaluation of the relative modification of an economic variable in the reaction of an alter in another.  

 

EXPLANATION:

Furthermore, there are four kinds of elasticity, each of them measures the correlation between two substantial economic variables. They are:

 

• Price elasticity of demand (PED), which evaluates the receptiveness of quantity required to a change in cost. PED can be evaluated over a cost range, called arc elasticity or sometimes called point elasticity.

• Price elasticity of supply (PES), which evaluates the receptiveness of quantity provided to a change in cost.

• Cross elasticity of demand (XED), which evaluates receptiveness of the quantity required of one good, good X, to a modification in the cost of another good, good Y.

• Income elasticity of demand (YED), which evaluates the receptiveness of quantity required to a modification in consumer revenues.

 

The idea of elasticity has an extremely wide scope of implementations in economics. In specific, knowledge of elasticity is essential in comprehending the supply response and demand in a marketplace. Some regular use of elasticity consists of:

• The outcome of changing the price of company revenue.  

• Incidence analysis of the tax burden and other government policies.  

• Revenue elasticity of demand, utilized as a sign of industry health, future expenditure patterns and as an indicator of companies’ investment decisions.  

• The outcome of global trade and terms of trade outcomes.  

• Consumption analysis of and saving behavior.  

• Advertising analysis on consumer request for certain goods.

 

LEARN MORE

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

• Suppose your elasticity of demand for your parking lot spaces is –2, and price is $8 per day. if your mc is zero, and your capacity is 80% full at 9 a.m. over the last month, are you optimizing? brainly.com/question/4095114

KEYWORDS : elasticity, economics

Subject  : Business

Class  : College

Sub-Chapter : Elasticity

Answer 2

The answer is that the given statement is True.
When firm has achieved greatest creation limit, firm should make extra speculation to extend generation plants and to accomplish this , firm should build the costs of the item which will influence the supply versatility.