Like price elasticity of demand, price elasticity of supply is a measure of responsiveness—a measure of the market sensitivity of supply. Price elasticity of supply can be defined as the degree of responsiveness of the quantity supplied of commodity in response to a small percentage (say 1%) change in its own price. The coefficient of price elasticity of supply of [...]
In this article we will discuss about the definition, measurement and properties of the elasticity of supply. Definition and Measurement of Elasticity of Supply: If any of the determinants of the supply of a good changes, then the capacity of its supply to increase or decrease in response to this change, is known as the elasticity of supply w.r.t. the [...]
The following points highlight the five main factors affecting the elasticity of supply. The factors are: 1. Price of the Good 2. Probability that the Price would Change in Future 3. Conditions Regarding Cost of Production 4. Nature of the Good 5. Length of Time. Factors # 1. Price of the Good: The supply and elasticity of supply of a [...]