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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
