Final answer:
Because there is a direct relationship between price and quantity supplied, the price elasticity of supply is positive. This represents the positive relationship, with suppliers offering more goods as prices rise. It is not necessarily always greater than zero, nor is it incalculable, and unlike price elasticity of demand, it is not negative.
Step-by-step explanation:
The student's question revolves around the concept of price elasticity of supply, which is the measure of responsiveness of the quantity supplied to a change in price. When there is a direct relationship between price and quantity supplied, it implies that as prices increase, suppliers are willing to offer more of the good for sale, and vice versa. Given this relationship, the correct answer is a) Price elasticity of supply is positive. This is because the percentage change in quantity supplied moves in the same direction as the percentage change in price.
Elasticities can be categorized as elastic, inelastic, or unitary. An elastic supply indicates a high responsiveness to price changes, with an elasticity greater than one. Inelastic supply suggests a low responsiveness, with an elasticity less than one. Unitary elasticity means that the percentage change in quantity supplied is equal to the percentage change in the price. Unlike the price elasticity of demand, which is always negative due to the inverse relationship between price and quantity demanded, the price elasticity of supply is typically positive.