The price of soap rose from $10 to $20 causing a trader to increase her supply from 50 to 120 boxes per week. This makes supply_________
Answer Details
The trader increased her supply from 50 to 120 boxes per week when the price of soap rose from $10 to $20. To determine whether the supply is unitary elastic, perfectly inelastic, fairly elastic, or inelastic, we need to look at the responsiveness of the quantity supplied to the change in price.
If the quantity supplied changes proportionally to the change in price, then supply is unitary elastic. If the quantity supplied does not change at all despite the change in price, then supply is perfectly inelastic. If the quantity supplied changes significantly in response to the change in price, then supply is fairly elastic. If the quantity supplied changes only slightly in response to the change in price, then supply is inelastic.
In this case, the trader increased her supply from 50 to 120 boxes per week, which is a significant increase. This suggests that the supply is fairly elastic, meaning that the quantity supplied is responsive to changes in price. Therefore, the correct answer is "fairly elastic".