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ELASTICITY OF SUPPLY
CONTENT
- Definition of Elasticity of Supply
- Degrees of Elasticity of Supply
- The Two Abnormal Elasticity of Supply
- Measurement of Elasticity of Supply
- Factors Affecting the Elasticity of Supply
Definition of Elasticity of Supply
Just as it is with demand, there also exists what we called Elasticity of Supply. Elasticity of Supply is the degree of responsiveness of the supply of a commodity to changes in price. If a change in price causes more than a proportionate change in supply, then supply is elastic. But if a change in prices causes a less than a proportionate change in supply, then supply is inelastic.
Degrees of Elasticity of Supply
- Elastic Supply
- Inelastic Supply
- Unitary Elastic Supply
The Two Abnormal Elasticity of Supply
- Perfectly Elastic Supply
- Perfectly Inelastic Supply
We shall illustrate all of these graphically, just as the case with demand
A (i) Elastic Supply
This is when change in price causes more than a proportionate change in supply.
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