Economics Supply And Demand Questions
Price elasticity of supply is a measure of the responsiveness of the quantity supplied of a good or service to a change in its price. It indicates how much the quantity supplied changes in percentage terms in response to a one percent change in price. If the quantity supplied is highly responsive to price changes, the supply is said to be elastic. On the other hand, if the quantity supplied is not very responsive to price changes, the supply is said to be inelastic. The price elasticity of supply is influenced by factors such as the availability of inputs, production time, and the ability to adjust production levels.