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Chapter 5: Q.19 (page 130)

Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?

Short Answer

Expert verified

In short run the demand is more elastic and supply is more elastic in long run.

Step by step solution

01

Step 1. Introduction:

The elasticity of demand and supply is majorly influenced by the time period of the production process.

02

Step 2. Explanation:

Because it takes time to adjust output to supply extra or less of a commodity, demand is likely to be highly elastic in the short run. Supply, on the other hand, is anticipated to be highly elastic, as sellers have an almost limitless capability to modify supply in response to price changes.

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Most popular questions from this chapter

If demand is elastic, how will an increase in price change total revenue? Explain.

The supply of paintings by Leonardo Da Vinci, who painted the Mona Lisa and The Last Supper and died in 1519, is highly inelastic. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that demand for these paintings will determine the price.

The equation for a demand curve is P = 48 鈥� 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?

If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?

What is the price elasticity of supply? Can you explain it in your own words?
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