APFIVE Price Floors And Supply Elasticity
If a government imposes a price floor above the equilibrium price, how might this affect the price elasticity of supply for the good in question?
A
It may become more elastic as producers respond to higher prices
B
It may become less elastic as consumers have fewer substitutes
C
The elasticity of supply would remain unchanged despite the imposition of a price floor
D
It may become perfectly inelastic as suppliers are forced to sell at the price floor
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