Price Elasticity of Supply Measures Responsiveness

Steps:

• Recall that elasticity measures how quantity supplied responds to price changes.
• Identify the standard formula: percentage change in quantity supplied divided by percentage change in price.
• Eliminate options lacking percentages, as elasticity uses relative changes.
• Confirm D matches the economic definition exactly.

Why D is correct:

• It follows the precise formula for price elasticity of supply (PES = %ΔQS / %ΔP), capturing proportional responsiveness as defined in microeconomics.

Why the others are wrong:

• A: Reverses the order, describing demand elasticity instead.
• B: Uses absolute price change, ignoring percentages needed for elasticity.
• C: Lacks percentages entirely, yielding slope rather than elasticity.

Final answer: D