Question
Which of the following producers is most likely to face a relatively elastic supply curve in the short run?
a. an automobile manufacturer corporation
b. a local restaurant who uses produce and ingredients from local farms
c. a national chain of grocery stores
d. an international shipping company
a. an automobile manufacturer corporation
b. a local restaurant who uses produce and ingredients from local farms
c. a national chain of grocery stores
d. an international shipping company
Answers
GPT-4o mini
In the short run, the producer most likely to face a relatively elastic supply curve would be:
**b. a local restaurant who uses produce and ingredients from local farms.**
The local restaurant has a more flexible supply in the short run because it can adjust its output based on the availability of local produce and ingredients. If the price of food increases, the restaurant can respond relatively quickly by adjusting menu prices or sourcing different ingredients.
In contrast, industries like automobile manufacturing or shipping often have higher fixed costs and longer production cycles, making their supply less elastic in the short run. National chains also have more constraints due to their scale and operations, which can limit their ability to quickly adjust supply.
**b. a local restaurant who uses produce and ingredients from local farms.**
The local restaurant has a more flexible supply in the short run because it can adjust its output based on the availability of local produce and ingredients. If the price of food increases, the restaurant can respond relatively quickly by adjusting menu prices or sourcing different ingredients.
In contrast, industries like automobile manufacturing or shipping often have higher fixed costs and longer production cycles, making their supply less elastic in the short run. National chains also have more constraints due to their scale and operations, which can limit their ability to quickly adjust supply.