Which of these products or services is likely to have an inelastic supply in the short run?
A. cargo ships
B. haircuts
C. newspapers
D. staples
To determine which product or service is likely to have an inelastic supply in the short run, we need to understand the concept of price elasticity of supply. Price elasticity of supply measures the responsiveness of the quantity supplied to a change in price.
Inelastic supply means that the quantity supplied is not very responsive to changes in price, indicating that the supply is relatively fixed in the short run. On the other hand, elastic supply means that the quantity supplied is highly responsive to changes in price, indicating that the supply can be easily adjusted in the short run.
Let's analyze the options:
A. Cargo ships: The supply of cargo ships is likely to be elastic in the short run. If the price of cargo ships increases, new ships can be built, though it may take time. In the short run, however, the supply of cargo ships is relatively fixed.
B. Haircuts: The supply of haircuts is likely to be inelastic in the short run. In the short run, barbershops typically have a fixed number of staff and fixed operating hours. If the price of haircuts increases, it may not be feasible for the barbershop to quickly increase the number of haircuts they can provide.
C. Newspapers: The supply of newspapers is likely to be elastic in the short run. If the demand for newspapers increases, more copies can be printed and distributed relatively quickly. While there may be some constraints on resources, such as paper and printing capacity, the supply of newspapers can be adjusted in the short run.
D. Staples: The supply of staples, like basic office supplies, is likely to be elastic in the short run. Manufacturers can increase production quickly if the price of staples increases, as they have the infrastructure and capacity to adjust supply relatively easily.
Based on the analysis above, the product or service that is likely to have an inelastic supply in the short run is B. haircuts.
Well, with three of those inexpensive and quickly produced, I could make a logical guess.
What do you think it is?