Answer to Question #254892 in Economics for ghada

Question

: In each of the following cases, do you think the price elasticity of supply is perfectly inelastic, elastic, or inelastic. Explain your answer. a. An increase in demand this summer for luxury cruises leads to a huge jump in the sales price of a cabin on the Queen Mary. b. Cement is the primary building material in Mexico. After new technology makes cement cheaper to produce, the supply curve for the Mexican cement industry becomes relatively flatter.

Answer 1

a. Demand for luxury cruises is elastic.

b. The supply of cement is inelastic.