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When the quantity supplied of a good changes substantially in response to a small change in its price, the supply is described as:
Arelatively greater elastic ($E_s > 1$)
Brelatively less elastic ($E_s < 1$)
Cperfectly inelastic ($E_s = 0$)
Dunit elastic ($E_s = 1$)
Answer & Solution
Correct answer: A. relatively greater elastic ($E_s > 1$)
1. A small price change causing a large quantity change means the percentage change in quantity exceeds the percentage change in price.
2. So $E_s > 1$.
3. An elasticity coefficient greater than one is relatively greater-elastic supply.
4. The answer is relatively greater elastic.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit III "Supply", p.6_
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