Given the following situations, say whether the elasticity of supply will be comparatively elastic or in elastic.
A. Labu villagers brought fresh fish to Lae market
B. A firm have fully utilized the available resources and Technology
C. A manufacturer who have used up half of its resources
D. A coffee grower is anticipating that price of coffee bean will rise in three months' time
E. A firm who is waiting for the new stock to arrive in 2 months period
A. Labu villagers brought fresh fish to Lae market: Comparatively elastic. The villagers can increase their supply of fresh fish by increasing their fishing efforts or by selling fish from neighboring villages.
B. A firm have fully utilized the available resources and Technology: Inelastic. The firm is operating at maximum capacity and cannot increase its supply without investing in additional resources or technology.
C. A manufacturer who have used up half of its resources: Comparatively elastic. The manufacturer can still increase its supply by utilizing the remaining half of its resources.
D. A coffee grower is anticipating that the price of coffee beans will rise in three months' time: Comparatively elastic. The coffee grower can increase their supply by planting more coffee trees or by increasing the production of coffee beans.
E. A firm who is waiting for the new stock to arrive in a 2-month period: Inelastic. The firm cannot increase its supply until the new stock arrives in two months.
Are you sure
I apologize for any confusion caused. Here are the revised answers:
A. Labu villagers brought fresh fish to Lae market: Comparatively inelastic. The supply of fresh fish from the villagers is limited to the amount they are able to catch, and it may be difficult for them to significantly increase their supply in the short term.
B. A firm has fully utilized the available resources and technology: Inelastic. If the firm is already operating at maximum capacity, it will be challenging for them to increase their supply without acquiring additional resources or technology.
C. A manufacturer who has used up half of its resources: Comparatively elastic. The manufacturer can still increase its supply by utilizing the remaining half of its resources.
D. A coffee grower is anticipating that the price of coffee beans will rise in three months' time: Inelastic. The grower's anticipation of a price increase does not directly impact their ability to increase supply. They would need to take action such as planting more coffee trees to increase their supply.
E. A firm that is waiting for the new stock to arrive in a 2-month period: Inelastic. The firm cannot increase its supply until the new stock arrives in two months.
What's the real answer
I apologize for the confusion. Here are the correct answers:
A. Labu villagers brought fresh fish to Lae market: Comparatively inelastic. The supply of fresh fish from the villagers may not be easily adjusted in the short term.
B. A firm has fully utilized the available resources and technology: Inelastic. If the firm is already operating at maximum capacity, it will be difficult for them to increase their supply without significant investments in resources or technology.
C. A manufacturer who has used up half of its resources: Comparatively elastic. The manufacturer can still increase its supply by utilizing the remaining half of its resources.
D. A coffee grower is anticipating that the price of coffee beans will rise in three months' time: Inelastic. The grower's anticipation of a price increase does not directly impact their ability to increase supply. They would need to take action, such as planting more coffee trees, to increase their supply.
E. A firm that is waiting for the new stock to arrive in a 2-month period: Inelastic. The firm cannot increase its supply until the new stock arrives in two months.
To determine whether the elasticity of supply will be comparatively elastic or inelastic in each situation, we need to consider the factors that influence supply elasticity.
1. Labu villagers brought fresh fish to Lae market:
If the Labu villagers have the ability to quickly increase the amount of fresh fish they bring to the market in response to changes in price, then the elasticity of supply will be comparatively elastic. However, if the villagers are limited in their ability to quickly increase supply, the elasticity of supply will be inelastic.
2. A firm has fully utilized the available resources and technology:
If a firm has already maximized the use of its available resources and technology, it means that it cannot significantly increase its production capacity in the short term. In this case, the elasticity of supply will be inelastic.
3. A manufacturer who has used up half of its resources:
The elasticity of supply for the manufacturer will depend on the availability and ease of acquiring additional resources. If there are readily available resources that can be easily obtained to increase production, the elasticity of supply will be comparatively elastic. On the other hand, if acquiring additional resources is difficult or time-consuming, the elasticity of supply will be inelastic.
4. A coffee grower is anticipating that the price of coffee beans will rise in three months' time:
If the coffee grower can quickly respond to the anticipated increase in price by increasing coffee production within the next three months, the elasticity of supply will be comparatively elastic. However, if the grower cannot easily increase production within the given timeframe, the elasticity of supply will be inelastic.
5. A firm is waiting for the new stock to arrive in a two-month period:
If the firm has alternative sources or substitutes for the stock it is waiting for, the elasticity of supply will be comparatively elastic. It means they can switch to another source and maintain or increase their supply. Conversely, if the firm relies solely on the specific stock it is waiting for and there are no alternatives, the elasticity of supply will be inelastic.
In summary:
- Compared to the other situations, if the ability to increase supply in response to price changes is relatively easy and quick, the elasticity of supply will be comparatively elastic.
- Conversely, if the ability to increase supply is limited or time-consuming, the elasticity of supply will be inelastic.