Which of the following producers is most likely to face a relatively elastic supply curve in the short run?(1 point)
Responses
a local restaurant who uses produce and ingredients from local farms
a local restaurant who uses produce and ingredients from local farms
an automobile manufacturer corporation
an automobile manufacturer corporation
a national chain of grocery stores
a national chain of grocery stores
an international shipping company
a local restaurant who uses produce and ingredients from local farms
Out of the provided options, the international shipping company is most likely to face a relatively elastic supply curve in the short run. This is because the supply of shipping services can be more easily adjusted in response to changes in demand compared to the other options. For example, if there is a sudden increase in demand for shipping services, the company can potentially increase its capacity by adding more ships or hiring more staff. On the other hand, options like a local restaurant or a national chain of grocery stores may face more constraints in adjusting their supply, such as the availability of local produce or space in stores.
To determine which producer is most likely to face a relatively elastic supply curve in the short run, we need to consider the factors that influence supply elasticity. Supply elasticity refers to the responsiveness of the quantity supplied to changes in price.
In general, the more time a producer has to adjust their production levels in response to price changes, the more elastic their supply curve will be. This is because producers need time to make changes to their production processes or acquire additional inputs.
Considering this, let's analyze each option:
1. A local restaurant who uses produce and ingredients from local farms:
In the short run, a local restaurant may face a relatively inelastic supply curve. This could be because they have pre-existing contracts with local farms for a specific quantity of produce and ingredients. These contracts may not allow for immediate adjustments in supply even if prices change.
2. An automobile manufacturer corporation:
Automobile manufacturing involves complex production processes and long lead times for acquiring raw materials. Therefore, in the short run, an automobile manufacturer is likely to face a relatively inelastic supply curve since it may not be feasible to quickly adjust production levels or acquire additional inputs.
3. A national chain of grocery stores:
Grocery stores deal with a wide range of products, and their supply elasticity can vary depending on the specific item. In general, however, grocery stores may have more flexibility in adjusting their supply since they can source products from multiple suppliers. Therefore, in the short run, a national chain of grocery stores is likely to face a relatively elastic supply curve compared to the previous options.
4. An international shipping company:
International shipping companies usually operate on long-term contracts and have significant logistical considerations. These factors make it difficult to quickly adjust shipping capacity in the short run. Thus, an international shipping company is likely to face a relatively inelastic supply curve in the short run.
Based on this analysis, the national chain of grocery stores is the most likely to face a relatively elastic supply curve in the short run.