Elasticity of Supply and Factors Of Supply Elasticity

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If producers expect price changes to be temporary, increasing production for the producer does not benefit, hence the elasticity of supply is low. However, if the price change will take longer, the producer will be able to adjust the production according to the new price. Therefore, the supply will be more flexible


Elasticity of Supply and Factors Of Supply Elasticity
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ELASTICITY OF SUPPLY

The price elasticity of supply and factors of supply elasticity is the measure of the responsiveness of changes in the quantity demanded of a good to change in the price of a good.

Notice that the demand elasticity is the same formula as the demand elasticity. Just in the quantity demanded demand elasticity Q, while the Q refers to the amount of supplied here. Also, while demand elasticity is always negative (due to the inverse relationship between price and demand) price elasticity of supply is always positive.

Amortisman (Amortization) Schedule Details

 

Factors Affecting Supply Elasticity

• Short Term-Long Term:

The short-run supply elasticity of demand is low. For example, suppose that price increases in the market, which will motivate manufacturers to produce more. However, it is not possible to increase production in a short period of time. (Especially the increase in agricultural production requires at least 1 season) therefore, supply cannot keep pace with the price change in the short run. In the long run, supply elasticity is high.

Whether The Goods Are Substitutes In Production

If there are substitutes in production, supply will be flexible, or it will not be flexible.

For example, farmers in Cukurova produce various agricultural products such as cotton, corn, wheat, watermelon in their fields. This agricultural if you increase the price compared to others, this relative price will remain the same if you have the expectation that the increase in new production in the season, which increased at less than the price of the product more other products will be produced. Because various agricultural products are competing in production.

The Price Elasticity Of Demand For A Good

Price elasticity of demand They are not flexible, especially because it is difficult to store non-fragile agricultural products such as vegetables and fruits. In contrast, the supply of durable goods such as automobiles, white goods, and furniture is more flexible. Because it is possible to store durable goods for a long period of time, the price can be reduced significantly by the amount of supply. Similarly, in addition to increasing production as prices rise, existing stocks are also using.

How Does The Cost Change As The Quantity Of Goods Produced Increases?

How does the supply curve change when production increases affect the elasticity of supply? As production increases, the costs of production unless he gets much worse, supply will be less flexible, as production increases, manufacturing costs increase significantly, the supply will not be flexible.

Time

The time period after the price change affects the price elasticity of supply. Elasticity of demand

 

 

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