Question

Over time, the price elasticity of supply for sunglasses will become more:

a. inelastic.

b. unitary elastic.

c. unchanged.

d. elastic.

e. perfectly elastic.

If the price elasticity of supply is 2.5, we know that it is:

	a. perfectly elastic.
	b. perfectly inelastic.
	c. unitary elastic.
	d. relatively inelastic.
	e. relatively elastic.

Answer 1

Q1
Answer
Option d
In the long run, more and more competitors will enter the market and the consumer will have options to choose or substitutes for sunglasses will enter the market and the demand for sunglasses will be elastic.

Q2
Answer
Option e
The elasticity of supply is above 1 so that it is elastic because the elasticity is the measure of the sensitiveness of quantity because of change in price. If the price elasticity of supply is 2.5 then the change in $1 price will change quantity supplied in the same direction by 2.5 units