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Price Elasticity of Supply (PES)
% change in quantity supplied ÷ % change in price.
Elastic Supply
PES > 1; producers can adjust output easily.
Inelastic Supply
PES < 1; output is hard to change.
Unit Elastic Supply
PES = 1.
Perfectly Elastic Supply
horizontal supply curve (ANY price change = qDemanded completely 0)
Perfectly Inelastic Supply
Characterized by a vertical supply curve. (people buy no matter price)
Surplus
Excess supply at a price above equilibrium.
Momentary Supply
Very short run; quantity is fixed (perfectly inelastic).
Short-Run Supply
Some inputs are fixed; limited flexibility.
Long-Run Supply
All inputs are variable; firms can enter or exit the market.
Alternative Input
A different resource that can substitute in production, increasing supply flexibility.