Economics · May / June 2022 · Paper 11 · Question 9
2281Price elasticity of supply (PES)
A firm has a high price elasticity of supply for its product. What does this indicate?
- AIt can increase revenue by reducing the price.
- BIt can quickly respond to changes in price.
- CIt keeps very low volumes of product in stock.
- DIt produces a good that has close substitutes.
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Correct answer: B. It can quickly respond to changes in price.
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