Supply Elasticity Varies by Time Period

Steps:

• Price elasticity of supply (PES) measures how quantity supplied responds to price changes, calculated as (%ΔQ_s / %ΔP).
• In the momentary period, supply is fixed, so PES = 0 (perfectly inelastic).
• In the short run, limited adjustments make PES low but positive.
• In the long run, full adjustments (e.g., new capacity) make PES higher and more responsive.

Why B is correct:

• Economic theory states PES increases with time as producers gain flexibility to expand output, aligning with the law of supply responsiveness.

Why the others are wrong:

• A: PES can change in the short run due to minor adjustments like overtime, though it's typically low.
• C: PES is zero (perfectly inelastic) in the momentary period, not infinite.
• D: PES is highly elastic (often greater than 1) in the long run, not zero.

Final answer: B