price elasticity of supply

price elasticity of supply

measure of how much the qs of a good responds to the change in pric

flexibility of seller to change

if the sellers are able to sell goods from different places and if they can adapt

length of the production period

quick production - elastic supply curve

slow production - inelastic supply curve

availability of space capacity

firms can easily adjust qs to price change OR it is harder to adjust output of price change

market entry barriers

many barriers - inelastic

little barriers - elastic

ease of accumulating stocks

when firms can store & keep unsold goods, they can adjust to the price change quicker

time scale/horizon

period that the firms need to adjust their production inputs

elastic - long run

short run - inelastic

e > 1

elastic supply

many reactions to changes in price

e = infinity

endless amount of products (no such thing irl)

e = 1

unit elastic supply

qs is the same as the price

e < 1

inelastic supply

qs responds slightly to change in price

e = 0

qs is the same regardless of price