Price rise is inversely related to supply elasticity

Steps:

• Demand shifts right by 5 units, creating excess demand at initial price.
• New equilibrium requires supply to increase by 5 units.
• PES = (%ΔQ_s / %ΔP); for fixed ΔQ=5, lower PES requires larger %ΔP.
• Thus, smallest PES yields largest price increase.

Why A is correct:

• PES=0 means perfectly inelastic supply (vertical curve); entire demand shift absorbed by price rise, per elasticity definition.

Why the others are wrong:

• B: PES=0.6 allows some quantity response, reducing needed price rise.
• C: PES=1.5 is more elastic than B, enabling larger quantity increase and smaller price rise.
• D: PES=2.5 is most elastic, maximizing quantity response and minimizing price rise.

Final answer: A