Say a that a supplier's costs have increased: for example a manufacturer is faced with a higher cost of raw materials and labor, or a service provider has to comply with expensive new government regulations.

In which case is it most likely that the manufacturer or provider will be able to pass the increased costs on to the consumer in the form of a higher price?

1. Demand is highly elastic
2. Demand is highly inelastic
3. Elasticity of demand is unitary (equals 1)
4. The ability to pass on the increased costs to the consumers does not depend on elasticity of demand.

Question 2: Elasticity Say a that a supplier's costs have increased: for example a manufacturer is faced with a higher cost of raw materials and labor, or a service provider has to comply with expensive new government regulations. In which case is it most likely that the manufacturer or provider Will be able to pass the increased costs on to the consumer in the form of a higher price? a) Demand is highly elastic b) Demand is highly inelastic c) Elasticity of demand is unitary (equals 1) d) The ability to pass on the increased costs to the consumers does not depend on elasticity of demand. Type your answer and explanation here