It has been estimated that the price elasticity of supply (PES) of flood defences is 0.25 in the short run and 1.25 in the long run. Which of the following combinations of statements is correct?
Select ONE answer:
- Short run PES of flood defences – Elastic / Long run PES of flood defences – Elastic
- Short run PES of flood defences – Elastic / Long run PES of flood defences – Inelastic
- Short run PES of flood defences – Inelastic / Long run PES of flood defences – Elastic
- Short run PES of flood defences – Inelastic / Long run PES of flood defences – Inelastic
Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple choice question is suitable for Economics KS5 classes.
The answer is 3
- In the short run price elasticity of supply is inelastic.
- Over time price elasticity of supply becomes more elastic.
- Correct: In the short run price elasticity of supply is inelastic and in the long run it becomes elastic.
- In the long run price elasticity of supply is elastic.
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