_JoHNnY_
Supreme Member
hey i was wandering if anyone had any economics notes on "price elasticity of supply" or if anyone has done an essay on it.
i need help
i need help
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Economics (1 Viewer)
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Price Elasticity of Supply
-Applies the same way as demand.
-Measures the responsiveness or sensitivity of quantity supplied due to changes in price. The more elastic the supply, the greater the response to a change in price.
Price Elasticity and the Slope of the Supply Curve
Perfect Elastic Supply
Horizontal straight line reveals an infinite quantity of the good, whereas the price would not be able to supply any.
Perfect Inelastic Supply
Vertical line reveals the quantity supplied is fixed regardless of the price. The supply of a unique piece of art may be perfectly inelastic, if only one exists, then the supply is fixed at one regardless of price.
-Between these two theoretical extremes of perfectly elastic and inelastic supply, there are many possible variations in the shape of the supply curve, similar to demand.
Factors Affecting Elasticity of Supply
Time lags after a price. The greater the amount of time that producers have to respond to a price change, the more elastic the supply for the product in question. In the short run, the price inelasticity of supply increases though it is still likely to be relatively inelastic. In the long run, its relatively price elastic, because producer would be able to increase any of the inputs.
The Ability to hold and Store Stock
It is possible to store some goods and not offer them for sale when there is a downturn in the market conditions and the price falls. This stock of goods can be offered for sale when price rises. The ability to hold stock will affect the ease with which producers can respond to price changes. Its easier to hold stock the more elastic the supply, things like fruits and vegetables would be harder to stock and would be inelastic, more durable like furniture would be more elastic.
Excess Capacity
This happens when a firm is not using its existing resources to tier full capacity. Supply will be elastic when firms have excess capacity because they can respond quickly to any price increase by simply using their existing resource more intensively.
-Applies the same way as demand.
-Measures the responsiveness or sensitivity of quantity supplied due to changes in price. The more elastic the supply, the greater the response to a change in price.
Price Elasticity and the Slope of the Supply Curve
Perfect Elastic Supply
Horizontal straight line reveals an infinite quantity of the good, whereas the price would not be able to supply any.
Perfect Inelastic Supply
Vertical line reveals the quantity supplied is fixed regardless of the price. The supply of a unique piece of art may be perfectly inelastic, if only one exists, then the supply is fixed at one regardless of price.
-Between these two theoretical extremes of perfectly elastic and inelastic supply, there are many possible variations in the shape of the supply curve, similar to demand.
Factors Affecting Elasticity of Supply
Time lags after a price. The greater the amount of time that producers have to respond to a price change, the more elastic the supply for the product in question. In the short run, the price inelasticity of supply increases though it is still likely to be relatively inelastic. In the long run, its relatively price elastic, because producer would be able to increase any of the inputs.
The Ability to hold and Store Stock
It is possible to store some goods and not offer them for sale when there is a downturn in the market conditions and the price falls. This stock of goods can be offered for sale when price rises. The ability to hold stock will affect the ease with which producers can respond to price changes. Its easier to hold stock the more elastic the supply, things like fruits and vegetables would be harder to stock and would be inelastic, more durable like furniture would be more elastic.
Excess Capacity
This happens when a firm is not using its existing resources to tier full capacity. Supply will be elastic when firms have excess capacity because they can respond quickly to any price increase by simply using their existing resource more intensively.
Last edited:
virgin^sexy
ctn, t9
thanks Demandred, i needed that too!