If price increases and quantity supplied rises moderately, the supply is considered

• A. Elastic
• B. Inelastic
• C. Unitary elastic
• D. Perfectly inelastic

Answer: (A)

The main idea is how responsive quantity supplied is to a change in price, which is measured by the elasticity of supply. When the price rises and producers respond by increasing the amount they are willing to supply, there is a positive, observable response to the price signal. If that response is noticeable enough—even if not enormous—the supply is considered elastic in introductory terms, because quantity supplied changes as price changes. This is in contrast to perfectly inelastic supply, where quantity would not change at all, and to unit elastic, where the percentage change in quantity would match the percentage change in price. So a scenario where a price increase leads to a moderate rise in quantity supplied reflects an elastic (responsive) supply.