Economics of Food and Agriculture
Price elasticity of supply measures how much the quantity supplied of a good changes in response to a change in its price. A high price elasticity indicates that suppliers can easily adjust production levels when prices fluctuate, while a low elasticity suggests that changes in price have little impact on the quantity supplied. Understanding this concept is crucial for analyzing market dynamics, as it directly influences how suppliers respond to price changes, thus affecting market equilibrium and overall price determination.
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