Why do we need a units-free measure of the responsiveness of the quantity supplied of a good or service to a change in its price?
What will be an ideal response?
The elasticity of supply is a units-free measure. We need a units-free measure of the elasticity of supply for the same reason we need a units-free measure of the elasticity of demand: Because the value of the elasticity of supply is independent of the units used to measure the price and quantity of the good, the elasticity of supply can be compared across the same good when quantity is measured in different units and/or the price is measured in different currencies. In addition, the elasticities of supply of different goods also can be compared even though they are measured in different units.
You might also like to view...
Refer to the data. The national income is:
Answer the question on the basis of the following data. All figures are in billions of dollars.
A. $265.
B. $223.
C. $208.
D. $346.
A complete information game is a special case of an incomplete information game -- where "Nature" assigns each player a "type" with probability 1.
Answer the following statement true (T) or false (F)