Question

For which of the following products or services is the supply likely to be inelastic in the short term regardless of whether prices rise or fall?

newspapers


staples


haircuts


cargo ships

Answer 1

The answer to your question would be Cargo Ships

Answer 2

The correct answer is: "cargo ships".

The supply function represents the quantity of a certain good or service that producers are willing to offer in the market at different price levels. It is inelastic when price variations slightly change the willigness of suppliers, who barely change the amount offered in the market.

The supply for cargo ships is considered inelastic because their production process lasts about two years, and taking the already-produced ship out of circulation is even more costly than the losses beared because of a decrease in the price charged for it in the markets.