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Question
How do producers who are subject to a binding price ceiling respond as the time frame shifts from the short run to the long run?
a. Producers are increasingly willing to substitute away from producing the good, and their elasticity of supply becomes less elastic.
b. There are no changes, and elasticity of supply remains unchanged.
c. Producers are increasingly willing to substitute away from producing the good, and their elasticity of supply becomes more elastic.
d. Producers are less willing to substitute away from producing the good, and their elasticity of supply becomes less elastic.
e. Producers are less willing to substitute away from the good, and their elasticity of supply becomes more elastic.
Answer
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