SAS10: Elasticity of Supply Flashcards
It refers to the reaction or response of the sellers to changes in the prices of goods and services.
Supply Elasticity
It measures the percent change in quantity supplied
divided by the percentage in price of goods and services.
Elasticity of Supply
Based in the law of supply, sellers are willing and able to offer more goods at a higher
price, and offer less goods at a lower price. However, such responses vary in accordance to the _________ they produce and the _________.
kind of goods (agricultural or industrials) ; time involve in the production of such goods
What are the types of Supply Elasticity?
Elastic Supply, Inelastic Supply, Unitary Supply, Perfectly Elastic Supply, & Perfectly Inelastic Supply
This type of supply happens when a change in price leads to a greater change in quantity supplied.
Elastic Supply
This type of supply happens when a change in price leads to a lesser change in quantity supplied.
Inelastic Supply
This type of supply happens when a change in price results to an equal change in quantity supplied.
Unitary Supply
Goods under Unitary Supply are considered?
Semi-agricultural & Semi Industrial
This type of supply happens when elasticity coefficient equals infinity.
Perfectly Elastic Supply
This type of supply happens when a given quantity of it can be supplied whatever might be the price.
Perfectly Inelastic Supply
What are the Determinants of Supply Elasticity?
Marginal Cost, Time, Number of Firms, The Mobility of Factors of Production, & Capacity
It is the increase in cost by producing just one more unit.
Marginal Cost
Price elasticity of supply tends to become more elastic, which means that producers would increase the quantity supplied by a larger percentage than an increase in price.
Time
What is the formula for Price Elasticity of Supply?
E = △Q/Q over △P/P
It is the measure of responsiveness of producers and resource suppliers to the change in price of a produce or resource.
Price Elasticity of Supply
