Why do some firms experience elastic supply curves at low levels of quantity supplied and more inelastic supply curves at higher levels of quantity supplied?
| A. At lower levels of quantity supplied, these firms have idle capacity. | | |
| B. At higher levels of quantity supplied, these firms incur lower production costs. | | |
| C. At higher levels of quantity supplied, these firms have idle capacity. | | |
| D. At lower levels of quantity supplied, these firms incur higher production costs. | |
\"A\"
When a firm has an idle capacity or excess capacity they can increase the production to meet the excess demand easily making the supply elastic. But at a higher level of production, there is no idle capacity making it inelastic.
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