Read the scenario below and then answer the question. Sample scenario: Scientists have created a new grass seed that stops grass
growth at a specific length, eliminating the need to mow the lawn. The price of this seed is high, but many consumers still want to use it. As a result, several different producers supply a large amount of this seed to consumers. In order to attract consumers to their product, some producers lower their prices and supply fewer bags of seeds. What is the best description of the grass seed that is described in this scenario? a good with a low price a good with a high price a good with an inelastic supply a good with an elastic supply
The answer is<u> "a good with an elastic supply"</u>
A good or service has an elastic supply when the rate change in the amount provided surpasses the rate change in cost. By and large the supplier can react rapidly to a value change.
Elasticity of supply is estimated as the proportion of proportionate change in the amount provided to the proportionate change in cost. High elasticity demonstrates the supply is touchy to changes in costs, low elasticity shows little affectability to value changes, and no elasticity implies no association with cost. Likewise called value elasticity of supply.
Elastic supply goods are often seen as luxury items, and a grass that stops its growth at a certain length can be considered as a luxury item, an elastic supply good is described as an item which supply varies with the market price at which is set, in this example you can see that the grass is expensive and people buy it a lot, but when other suppliers lower their cost the demand decreases, meaning that their consumers are actually in the higher-end spectrum.
