What Are The Factors That Affect The Price Elasticity Of Supply Quizlet?

What are the factors that affect price elasticity of supply?

There are numerous factors that impact the price elasticity of supply including the number of producers, spare capacity, ease of switching, ease of storage, length of production period, time period of training, factor mobility, and how costs react..

What is the greatest factor affecting the elasticity of supply quizlet?

The main factors affecting the price elasticity of supply include production time periods (e.g. the market period, the short run and the long run); the extent of inventories or ability to hold stocks; and the extent of excess capacity in the firm or the industry.

What is elasticity of supply and its types?

Overall, price elasticity measures how much the supply or demand of a product changes based on a given change in price. Elastic means the product is considered sensitive to price changes. Inelastic means the product is not sensitive to price movements.

How is the elasticity of supply affected by the way a product is produced quizlet?

Higher production costs make supplying a product less profitable, resulting in firms being less willing to supply the good. … If that number is more than one, the product shows price elasticity. If it is less than one, the product is inelastic. Technology innovation can reduce supply elasticity.

What factors would likely explain why Chevrolet cars are very elastic?

8. What factors would likely explain why Chevrolet cars are very elastic? Chevrolet cars would be very elastic because we don’t have to buy that brand of car – we have lots of substitutes.

What does the elasticity of demand measure in general?

The price elasticity of demand measures the sensitivity of the quantity demanded to changes in the price. Demand is inelastic if it does not respond much to price change, and elastic if demand changes a lot when the price changes.

What is the main factor that affects elasticity of supply and how does it affect elasticity quizlet?

the ease with which a producer can change production to respond to price changes is the main factor that affects supply. producers that can respond more easily and quickly will have more elastic supply than producers who have a difficult time responding to price changes.

What causes elasticity?

In physics and materials science, elasticity is the ability of a body to resist a distorting influence and to return to its original size and shape when that influence or force is removed. … For rubbers and other polymers, elasticity is caused by the stretching of polymer chains when forces are applied.

What is the greatest factor affecting the elasticity of supply?

The supply and elasticity of supply of a good depend upon the price of the good. If the price of a good increases or decreases, the quantity supplied of it will also increase or decrease, respectively. This is the law of supply.

What is an example of perfectly elastic supply?

If supply is perfectly elastic, it means that any change in price will result in an infinite amount of change in quantity. Suppose that you baked delicious cookies and your costs, including inputs and time, were $3 per cookie. At $3, you would be willing to sell as many cookies as you could.

What are the determinants of elasticity?

The main determinants of a product’s elasticity are the availability of close substitutes, the amount of time a consumer has to search for substitutes, and the percentage of a consumer’s budget that is required to purchase the good.

What are two factors that affect elasticity?

Many factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes. High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.

What are 4 factors that affect elasticity?

The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed.

What is the price elasticity of supply Can you explain it in your own words?

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. We compute it as the percentage change in quantity demanded (or supplied) divided by the percentage change in price.

What are the six factors that cause a change in supply and define them?

changes in non-price factors that will cause an entire supply curve to shift (increasing or decreasing market supply); these include 1) the number of sellers in a market, 2) the level of technology used in a good’s production, 3) the prices of inputs used to produce a good, 4) the amount of government regulation, …

What is the price elasticity of supply quizlet?

“Price elasticity of supply” measures the responsiveness of supply to changes in price. Explain how you calculate the “P.E.S.” The “P.E.S.” is calculated by dividing the %-change in quantity supplied by the %-change in price.

Which of the following is not a factor affecting elasticity?

The goods price range is not a factor affecting elasticity.

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