Elasticity of Supply Unit 5.4

Elasticity and Supply Elasticity with supply works just like elasticity with demand. Suppliers look at the amount of change in price, and look at the change in supply.

Factors that Affect Elasticity of Supply Time – The main factor that affects elasticity of supply – Short Run Over the short run, businesses may only be able to effect changes in limited ways, thus making it difficult to adjust to changes in prices – Long Run Over the long run, businesses can make any changes they want (in theory) Availability of Resources – Difficult to get resources makes supply more inelastic Need for Skilled Labor – The more skilled labor needed, the more inelastic supply becomes