PES Flashcards
1
Q
Elastic supply
A
Producers can increase output without a rise in cost or a time delay
2
Q
Inelastic supply
A
Firms find it hard to change production in a given time period
3
Q
PES > 1
A
Supply is price elastic
4
Q
PES < 1
A
Supply is price inelastic
5
Q
PES = 0
A
Supply is perfectly inelastic
6
Q
PES = infinity
A
Supply is perfectly elastic following a change in demand
7
Q
What factors affect the elasticity of supply
A
Spare capacity
Stocks of finished products and components
Ease and host of factor substitution/mobility
Time period and production speed
