Economics Supply And Demand Questions Medium
The difference between a price elastic supply and a price inelastic supply lies in the responsiveness of the quantity supplied to changes in price.
A price elastic supply refers to a situation where the quantity supplied is highly responsive to changes in price. In other words, a small change in price leads to a relatively larger change in the quantity supplied. This occurs when producers have the ability to quickly adjust their production levels in response to price changes. For example, if the price of a good increases, producers can easily increase their production to take advantage of the higher price, resulting in a relatively large increase in the quantity supplied.
On the other hand, a price inelastic supply refers to a situation where the quantity supplied is not very responsive to changes in price. In this case, a change in price leads to a relatively smaller change in the quantity supplied. This occurs when producers are unable to quickly adjust their production levels in response to price changes. For example, if the price of a good decreases, producers may not be able to reduce their production immediately, resulting in a relatively small decrease in the quantity supplied.
In summary, the key difference between a price elastic supply and a price inelastic supply is the degree of responsiveness of the quantity supplied to changes in price.