If the supply of a good is inelastic, _____.
(A) Producers have diminishing marginal returns of labor.
(B) A small increase in price will lead producers to sharply increase their quantity supplied.
(C) Producers will increase their quantity supplied in response to sharp drops in the market price.
(D) Producers will not change their quantity supplied by much even if the market price doubles.
Ans: (D) Producers will not change their quantity supplied by much even if the market price doubles.
You might also like to view...
If current output is less than the profit-maximizing output, then the next unit produced
A) will decrease profit. B) will increase cost more than it increases revenue. C) will increase revenue more than it increases cost. D) will increase revenue without increasing cost. E) may or may not increase profit.
When an external cost exists that is NOT taken into account in the production of a product,
A) the level of output is too low, and the supply curve should shift to the right to account for the externality. B) the level of output is optimal, and there should be no change in the supply curve. C) the price of the product is too high, and production should be expanded to lower the price. D) the level of output is too high, and the supply curve should shift to the left to account for the externality.