Price Floors And Supply Elasticity
If a government imposes a binding price floor on a good, which of the following describes a likely effect on its price elasticity of supply?
A
It may become perfectly inelastic as suppliers are forced to sell at the price floor
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 more elastic as producers respond to higher prices
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