What is Elasticity of supply?

Elasticity of supply is the measure of how sensitive the quantity supplied of a product is to a change in its price.

A good with an elastic supply will experience a greater percentage change in the quantity supplied in response to a price change.

A good with an inelastic supply will experience a lesser percentage change in the quantity supplied in response to a price change.

The elasticity of supply for basic necessities such as food and water is usually lower than for luxury items.

A company with a monopoly will usually have an inelastic supply, as it is the only producer of that good.

The elasticity of supply can also be affected by the availability of resources or the cost of production.

For seasonal goods, the elasticity of supply will be higher during peak seasons and lower during off-seasons.

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