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Unformatted text preview: nominator. For
example, suppose the price of lightbulbs
increases by 10 percent, and the quantity
supplied of lightbulbs increases by 20 percent. The numerator (20%) changes by
more than the denominator (10%), so the
supply of lightbulbs is elastic.
Inelastic supply exists when the quantity
supplied changes by a smaller percentage
than price—that is, when the numerator
changes by less than the denominator. Finally,
unit-elastic supply exists when the quantity
supplied changes by the same percentage as
price—that is, when the numerator changes
by the same percentage as the denominator. Defining Terms
a. elastic supply
b. inelastic supply
c. per-unit cost
f. technology Reviewing Facts
2. Identify what happens
to a given supply curve
as a result of each of the
a. Resource prices fall.
b. Technology advances.
c. A quota is repealed. Elasticity of Supply Exhibit 5-6 reviews the definitions of elastic,
inelastic, and unit-elastic supply.
Firm A currently produces
400 skateboards a day at $50 a...
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This document was uploaded on 01/16/2014.
- Winter '14