Which of the following producers is most likely to face a relatively elastic supply curve in the short run?(1 point)
Responses
a an automobile manufacturer
b an international shipping company
c a national chain of grocery stores
d a local restaurant who uses produce and ingredients from local farms
d a local restaurant who uses produce and ingredients from local farms
D
In the short run, a local restaurant that uses produce and ingredients from local farms is most likely to face a relatively elastic supply curve. This is because local farms may be able to quickly adjust their supply in response to changes in demand from the restaurant.
To determine which of the following producers is most likely to face a relatively elastic supply curve in the short run, we need to understand the factors that affect the elasticity of supply.
Elasticity of supply measures the responsiveness of the quantity supplied to changes in price. A relatively elastic supply curve means that the quantity supplied is highly responsive to changes in price.
In the short run, the key factors that affect the elasticity of supply include:
1. Availability of inputs: The ease with which producers can access the necessary inputs, such as raw materials or labor, affects the responsiveness of supply. If inputs are readily available, producers can quickly increase or decrease production in response to price changes, leading to a more elastic supply curve.
2. Time frame: In the short run, producers have limited flexibility to adjust their production levels due to fixed factors of production, such as plant capacity or lease agreements. If it is difficult to quickly adjust production in response to price changes, the supply curve is less elastic.
Based on these factors, the producer most likely to face a relatively elastic supply curve in the short run would be the local restaurant that uses produce and ingredients from local farms (option d).
The local restaurant can source its ingredients from multiple farms and is not dependent on a single supplier or limited geographical area. This implies that it has more flexibility to switch suppliers or adjust its purchasing decisions based on price changes. Additionally, local farms usually have more short-term availability of produce and ingredients compared to international shipping companies or automobile manufacturers.
Therefore, in the short run, the local restaurant is more likely to have a relatively elastic supply curve compared to the other producers listed.