Short-run supply is inelastic; long-run is elastic

Steps:

• Recall PES formula: (%ΔQ / %ΔP), where short-run fixed inputs limit output response.
• In short run, bakery adjusts labor but not capital, yielding low PES (e.g., 0.5 for small quantity increase).
• In long run, all inputs adjustable, allowing larger output expansion and higher PES (e.g., 2.0).
• Compare values: short-run PES <1 (inelastic), long-run PES >1 (elastic).

Why A is correct:

• Matches economic principle: short-run PES (0.5) reflects fixed factors; long-run (2.0) allows full adjustment per supply curve theory.

Why the others are wrong:

• B: Long-run 1.4 understates elasticity gain from adjustable inputs.
• C: Incomplete option provides no valid values.
• D: Reverses runs—short-run can't exceed long-run elasticity.

Final answer: A