Economics (AS)·Price elasticity of supply · NSSCAS 2.2c
Price elasticity of supply
Narrated lesson · press play
Elasticity of demand told us how buyers respond to a price change; now we turn to the sellers. Price elasticity of supply measures how quickly and easily firms can change the quantity they produce when the price moves. We define it precisely, work a full calculation, draw the five ranges from perfectly inelastic to perfectly elastic, and explore what makes supply flexible or rigid — with the powerful role of time at the centre. Throughout we contrast a Namibian crop, stuck for a whole season, with a factory that can switch idle machines on within days.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Economics (AS) 2.2c):
- Explain the meaning and perform calculation of elasticity of supply
- Describe the range of elasticities of supply
- Discuss the factors affecting elasticity of supply
- Evaluate implications for speed and ease with which businesses react to changed market conditions
Loading your lesson…
You're watching a free 3-minute preview — create a free account to keep going.