Homework (Ch 05) - 12. Elastic and inelastic supply

The following graph plots a supply curve for some hypothetical good. Y 270 Supply PRICE (Dollars per unit) X 135 W 0 18 54 QUANTITY (Units)For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic. Region Elastic Inelastic Between X and Y O O Between V and W O O True or False: As firms reach near maximum capacity at high levels of quantity supplied, supply becomes more elastic because firms may need to invest in additional capital in order to further increase production. O True O False