A business calculates that the price elasticity of supply for its product is 0.4. Is this a figure that should worry the business?
- ANo, as it implies that the firm will be able to raise revenue by raising price.
- BNo, as it suggests there are few substitutes for the product.
- CYes, as it indicates that the firm is not able to adjust supply easily when demand changes.
- DYes, as it means that demand for its product is increasing at a slow rate.