What is elasticity of supply? What does it mean to say that the supply is “elastic”?

Expert Solution

1) :-elasticity of supply

the responsiveness of producers (single sellers or the market as a whole) to a given price change.

price elasticity of supply measured by

Percentage change in the quantity supplied divided by the percentage change in the price

2) :- Supply is elastic called elastic when

the elasticity is greater than 1

The main determinant of elasticity of supply

is the amount of time a producer has to respond to a given change in product price (the longer the time, the greater will be the response, and therefore the greater will be the elasticity)

Rahul Sunny answered 2 years ago

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What is elasticity of supply? What does it mean to say that the supply is “elastic”?

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