Economics Elasticity Of Supply Questions
There are several factors that contribute to an inelastic supply:
1. Time: In the short run, it may be difficult for producers to adjust their production levels due to limited resources or fixed inputs. This can result in a less responsive supply to changes in price.
2. Availability of inputs: If the inputs required for production are scarce or difficult to obtain, it can limit the ability of producers to increase their supply in response to changes in price.
3. Production capacity: If producers are already operating at or near their maximum production capacity, they may not be able to increase their supply even if the price rises.
4. Complexity of production process: If the production process is complex or requires specialized skills, it may be difficult for new producers to enter the market and increase supply.
5. Perishability of goods: For goods that are perishable or have a limited shelf life, producers may not be able to increase supply quickly enough to meet changes in demand.
Overall, these factors contribute to a less elastic supply, meaning that the quantity supplied is less responsive to changes in price.