Explain the concept of relatively elastic supply.

Relatively elastic supply refers to a situation in which a change in price leads to a proportionately larger change in the quantity supplied. In other words, when the supply of a good or service is relatively elastic, suppliers are highly responsive to changes in price.

There are several factors that contribute to a relatively elastic supply. Firstly, if producers have the ability to quickly and easily adjust their production levels in response to price changes, the supply is likely to be relatively elastic. This flexibility allows suppliers to increase or decrease their output in a short period of time.

Secondly, the availability of substitute inputs or resources can also make the supply relatively elastic. If producers have access to alternative inputs or resources that can be easily substituted for the ones currently being used, they can quickly adjust their production levels in response to price changes.

Additionally, the time horizon plays a crucial role in determining the elasticity of supply. In the short run, when producers have limited time to adjust their production levels, the supply tends to be relatively inelastic. However, in the long run, when producers have more time to make adjustments, the supply becomes more elastic.

Furthermore, the elasticity of supply can also be influenced by the nature of the industry. In industries where there is intense competition and a large number of suppliers, the supply tends to be relatively elastic. This is because in such industries, producers are more likely to respond quickly to price changes in order to maintain their market share.

Overall, a relatively elastic supply indicates that suppliers are highly responsive to changes in price, and can adjust their production levels accordingly. This concept is important in understanding how changes in price affect the quantity supplied in the market.