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Softa [21]
4 years ago
10

Consider this scenario:

English
1 answer:
Lisa [10]4 years ago
5 0

The correct answer is A.

The supply function represents the quantity of a certain good or service that producers are willing to offer in the market at different price levels. The law of supply states that there is a direct relationship between price and quantity supplied (ceteris paribus, hence, given that the rest remains equal). <u>Therefore, when the price charged increases, the amount that producers are willing to offer increases too. </u>

The elasticity of the supply function is the size of the quantity variation triggered by a price variation. If the amount supplied barely changes the suppply function is inelastic and if it changes appropiately after the price increase, then the function is elastic.

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