Price Elasticity of Supply

Definition

Price elasticity of supply measures the responsiveness of quantity supplied to a change in price. It shows how sensitive producers are to changes in price.

Related terms

Perfectly Inelastic Supply: When there is no change in quantity supplied regardless of any change in price.

Total Revenue (TR): Total revenue refers to the total amount earned by sellers from selling their products or services.

Factors Affecting Supply Elasticity: These factors include production timeframes, availability of resources, and the ability to switch production to alternative goods.