Economics Elasticity Of Supply Questions Medium
The relationship between price and advertising elasticity is that they are both factors that influence the elasticity of supply. Price elasticity of supply measures the responsiveness of the quantity supplied to changes in price, while advertising elasticity measures the responsiveness of the quantity supplied to changes in advertising expenditure.
In general, when the price elasticity of supply is high, it means that suppliers are very responsive to changes in price. This implies that a small change in price will result in a relatively large change in the quantity supplied. On the other hand, when the price elasticity of supply is low, it means that suppliers are less responsive to changes in price, and a change in price will result in a relatively small change in the quantity supplied.
Similarly, when the advertising elasticity is high, it means that suppliers are very responsive to changes in advertising expenditure. This implies that a small change in advertising expenditure will result in a relatively large change in the quantity supplied. Conversely, when the advertising elasticity is low, it means that suppliers are less responsive to changes in advertising expenditure, and a change in advertising expenditure will result in a relatively small change in the quantity supplied.
Therefore, the relationship between price and advertising elasticity is that they both affect the responsiveness of suppliers to changes in their respective factors. A high elasticity indicates a greater responsiveness, while a low elasticity indicates a lesser responsiveness.