When price elasticity of supply is equal to 0.4, supply is said to be

Answer Details

When price elasticity of supply is equal to 0.4, supply is said to be inelastic. This means that the quantity supplied of a good or service is not very responsive to changes in price. In other words, when there is a change in price, the change in quantity supplied is relatively small. This situation can occur when it is difficult or costly for producers to adjust their production levels in response to price changes, for example, due to limited resources or fixed production capacity. When supply is inelastic, changes in demand can have a significant impact on the market price.