As demand for shoes rises, their price is pushed up. Firm Y raises its supply faster than firm Z does. What factor could account for this difference in the speed of their responses?
- AFirm Y has limited stocks of unsold shoes whereas firm Z has plentiful stocks of unsold shoes.
- BFirm Y has spare capacity in its factories whereas firm Z’s factories are working at full capacity.
- CFirm Y’s shoes are handmade whereas firm Z’s shoes are made by machine.
- DFirm Y’s shoes need raw materials which are in short supply whereas firm Z’s shoes need raw materials which are in plentiful supply.