Practice - Price Elasticity of Supply
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Practice Questions
Test your understanding with targeted questions
What does the price elasticity of supply measure?
💡 Hint: Think about what suppliers consider when prices fluctuate.
If a price increase leads to no change in quantity supplied, how elastic is the supply?
💡 Hint: Recall the definition of perfectly inelastic supply.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does a price elasticity of supply greater than 1 indicate?
💡 Hint: Recall the definitions of elastic and inelastic supply.
True or False: A perfectly inelastic supply curve is represented by a vertical line.
💡 Hint: Think about how inelastic supply behaves graphically.
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Challenge Problems
Push your limits with advanced challenges
A firm sees its production increase from 150 to 300 units when the price of its good increases from Rs 20 to Rs 50. Calculate the price elasticity of supply and assess the supply's responsiveness.
💡 Hint: Use the elasticity formula to analyze the changes.
If a market undergoes a technological innovation that reduces production costs, discuss how this will influence the price elasticity of supply.
💡 Hint: Consider the implications of lower costs on firm behavior.
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