O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2022 · Q91 Mark

A firm has a high price elasticity of supply for its product. What does this indicate?

AIt can increase revenue by reducing the price.

BIt can quickly respond to changes in price.

CIt keeps very low volumes of product in stock.

DIt produces a good that has close substitutes.

✓ Correct answer

B: It can quickly respond to changes in price.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2022 Paper 1 Variant 1, question 9.

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