B. In each of the following cases, do you think the price elasticity of supply is...

B. In each of the following cases, do you think the price elasticity of supply is (i) perfectly elastic; (ii) perfectly inelastic; (iii) elastic, but not perfectly elastic; (iv) inelastic, but not perfectly inelastic? Explain your answer.

An increase in demand this summer for domestic travel leads to a huge jump in the price of motel rooms.
The price of a kilowatt of electricity is the same during periods of high electricity demand as during periods of low electricity demand.
Fewer people want to fly during February than any other month. The airlines cancel about 10% of their flights as ticket prices fall about 20% during this month.
Owners of Airbnb vacation homes in Maine rent them out during the summer. Due to the covid pandemic, a 30% decline in the price of Airbnb rental leads more than half of homeowners to occupy their vacation homes themselves during the summer.

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Rahul Sunny answered 2 months ago

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