📈Price elasticity of supply measures how responsive quantity supplied is to changes in price.
💡An elastic supply occurs when the quantity supplied is relatively sensitive to changes in price.
💪An inelastic supply arises when the supply of a good or service does not change much with price.
🔀The supply curve can be perfectly elastic or perfectly inelastic in certain situations.
🔄Understanding price elasticity of supply helps us understand how suppliers respond to changes in price.
What is price elasticity of supply?
—Price elasticity of supply measures the responsiveness of quantity supplied to changes in price. It helps us understand how suppliers adjust their production in response to price changes.
What is an elastic supply?
—An elastic supply occurs when the quantity supplied is relatively sensitive to changes in price. In this case, a small change in price leads to a proportionally larger change in quantity supplied.
What is an inelastic supply?
—An inelastic supply occurs when the quantity supplied does not change much with price. In this case, a change in price has little impact on the quantity supplied.
What is a perfectly elastic supply?
—A perfectly elastic supply is a hypothetical situation where any change in price leads to an infinite change in quantity supplied. This is represented by a horizontal supply curve.
What is a perfectly inelastic supply?
—A perfectly inelastic supply is a hypothetical situation where the quantity supplied does not change in response to price changes. This is represented by a vertical supply curve.
00:00Introduction to price elasticity of supply.
01:10Explanation of elastic and inelastic supply.
03:28Understanding perfectly elastic and perfectly inelastic supply.
05:15Real-life examples of elastic and inelastic supply.
