If the supply of a product is elastic, a small reduction in price will

Answer Details

If the supply of a product is elastic, a small reduction in price will "increase the quantity supplied." The elasticity of supply measures the responsiveness of the quantity supplied of a product to changes in its price. When the supply of a product is elastic, a small change in price results in a relatively larger change in the quantity supplied. In other words, if the price of a product decreases, suppliers are able to increase the quantity of the product they are willing and able to supply. This is because the decrease in price makes it less expensive for suppliers to produce and sell the product, which in turn encourages them to supply more of it. Therefore, when the supply of a product is elastic, a small reduction in price will lead to an increase in the quantity supplied. Conversely, when the supply of a product is inelastic, a change in price will result in a relatively smaller change in the quantity supplied. It is important to note that the degree of elasticity of supply can vary depending on a number of factors, such as the availability of inputs, the ease of production, and the time horizon. In general, however, if the supply of a product is elastic, a small reduction in price will lead to an increase in the quantity supplied.