CIMA BA1 · Chapter 6 · Question 8 of 10
Which of the following would make the supply of a product more price INELASTIC?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A long production lead time and no spare capacity
Explanation
Supply is inelastic when producers cannot quickly increase output in response to a price rise. Long lead times and full capacity restrict the response. Stocks, mobile factors and a longer time period all make supply more elastic.
More Elasticity MCQs
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