Question

In the __________ the elasticity of supply is very elastic given no restraints on resources. An example of this occurs when a company moves to a larger plant (more capital) and can increase all other input resources and, thereby, can increase output.

Answer 1

Answer: Long run

Explanation:

The long-run is a period of time when all factors of production and the costs are variable. When firms are in the long run, they are able to adjust all costs. Also, a firm should expect competition in the long run.

In the long run, supply is elastic because a given percentage change in price will lead to a larger change in the quantity supplied of the good. A producer is flexible in his or her decisions on production.