Price Elasticity of Supply and Time Periods

Steps:

• Recall that price elasticity of supply (PES) measures responsiveness of quantity supplied to price changes.
• Identify how PES varies by time: very short run (fixed supply), short run (some adjustment), long run (full adjustment).
• Evaluate each option against economic definitions of time periods and elasticity.
• Select the statement aligning with the principle that longer periods allow greater supply flexibility.

Why B is correct:

• PES increases as the time period lengthens because firms can adjust inputs and production capacity more fully, per the law of supply.

Why the others are wrong:

• A: PES can change in the short run as firms make limited adjustments.
• C: PES is zero in the momentary period due to completely fixed supply.
• D: PES is highly elastic (not zero) in the long run with optimal adjustments.

Final answer: B