The correct answer is B. Price.
Elasticity of supply is a measure of how much the quantity supplied of a good or service changes in response to a change in its price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.
A good with elastic supply is one in which the quantity supplied changes by a large percentage in response to a small percentage change in price. A good with inelastic supply is one in which the quantity supplied changes by a small percentage in response to a large percentage change in price.
The price of a good is one of the most important factors that affects the quantity supplied of that good. When the price of a good increases, producers are willing to supply more of that good, and when the price of a good decreases, producers are willing to supply less of that good.
The other factors that can affect the quantity supplied of a good include the cost of production, the state of technology, and the prices of other goods. However, the price of a good is usually the most important factor that affects the quantity supplied.
Here is a brief explanation of each option:
- Option A: Demand. Demand is the willingness and ability of buyers to purchase a good or service. It is not a factor that affects the quantity supplied of a good.
- Option B: Price. Price is the amount of money that buyers are willing and able to pay for a good or service. It is the most important factor that affects the quantity supplied of a good.
- Option C: Cost of production. The cost of production is the amount of money that producers spend to produce a good or service. It is a factor that affects the quantity supplied of a good, but it is not as important as the price of the good.
- Option D: State of technology. The state of technology is the level of knowledge and skills that producers have about how to produce goods and services. It is a factor that affects the quantity supplied of a good, but it is not as important as the price of the good.