1. S&D Supply Elasticity

2. Quick Review………………….. 1.Law of Supply says…. 2.What is the #1 goal of producers? 3.If the price of sugar increases, what will happen to the supply of cakes? 4.If more clothing stores go online, what will happen to the supply of clothes? *** 5.If the technology to make 3D tvs improves, what will happen to the supply?

3. Supply Elasticity Some items will respond more to price change than others ELASTIC: supply responds to price changes –Supply of workers Nurses’ wages increase, supply of workers will increase

4. IN elastic Supply doesn’t (or can’t) respond too much to price change –Farming: price of corn increase, can’t increase supply immediately –Gas: can’t increase production quickly

5. Is gold supply elastic or inelastic? Explain.

6. Gold Short term = inelastic. Elasticity refers to change in quantity produced/demanded that results from a change in price. If a large price increase produces a large supply increase, then elastic. If the supply increase is small, then inelastic. Gold supply is hard to increase, so inelastic.