Answer to Question #258385 in Microeconomics for babyboy

Question

Which Change would make the supply of a product more price elastic?

A. an increase in the number of close substitutes for the product

B. An increase in the proportion of firms working at full capacity.

C. A reduction in the time taken to make the product

D. A reduction in the time that the product can be stored

Answer 1

Product price elastic is the measurement of the change in consumption of a product in relation to a change in its price. So, the more alternatives some product has, the more impact price change would do on its demand(small increase in price can push people to choose some alternative, small decrease in price can push people to choose considered object instead of its alternative. The number of alternative is one of the fundamental things that affects the price elasticity. The answer is A.