Which of the following is the most likely reason why the supply of specialized semiconductor microchips is price inelastic in the short run when their market price increases?
Semiconductor fabrication plants are currently operating with significant spare manufacturing capacity.
The raw materials required for fabrication are highly scarce and have lengthy extraction lead times.
Manufacturers maintain large inventories of finished microchips in climate-controlled distribution centres.
The consumer demand for electronic devices utilizing these microchips is highly price elastic.
256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.