Tag: supply - law of supply and price elasticity of supply

Questions Related to supply - law of supply and price elasticity of supply

When supply of a commodity remain same with change in price, this situation is called as _____________.

  1. elastic supply

  2. inelastic supply

  3. perfectly elastic supply

  4. perfectly inelastic supply


Correct Option: D

If supply of a commodity falls by $20$% due to decrease in price of the commodity by $10$%, then elasticity of supply will be _______.

  1. elastic

  2. unit elastic

  3. perfectly elastic

  4. none of the above


Correct Option: A
Explanation:

When change in supply is higher than the change in price of the commodity, the supply is elastic.

Elasticity of supply for a positively sloping supply curve that starts from price axis is ______.

  1. zero

  2. greater than one

  3. less than one

  4. equal to one


Correct Option: B

In case of perfectly elastic supply, the supply curve is _________.

  1. rising

  2. horizontal

  3. falling

  4. vertical


Correct Option: B

If elasticity of supply becomes negative, supply curve is _________.

  1. negatively sloping

  2. positively sloping

  3. horizontal

  4. vertical


Correct Option: A

When supply curve is upward sloping and originates from the starting point, elasticity is __________.

  1. infinity

  2. less than one

  3. zero

  4. one


Correct Option: D
The supply of durable goods is usually _____________.
  1. more elastic

  2. less elastic

  3. perfectly elastic

  4. perfectly inelastic


Correct Option: A
If ${E} _{s}=0.6$, and the percentage change in price $=5$, then percentage change in quantity supplied is ______.
  1. $8.33$

  2. $4.4$

  3. $5.6$

  4. $3$


Correct Option: D
If 18% fall in price of the commodity causes 27% decrease in its supply, elasticity of supply will be _______.
  1. 1.5

  2. 0.5

  3. 0.67

  4. 2.5


Correct Option: A

 Write True or False with a reason.
When a firm is using some rigid technology, its ${E} _{s}$ tends to be high.

  1. True

  2. False


Correct Option: B
Explanation:

False. When a firm is using rigid technology ${E} _{s}$ tends to be low. Because, possibilities of variation in output are reduced.