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Supply and Elasticity of Supply



Factors affecting elasticity of supply

Equations are omitted for technical reasons - download the original pdf

The longer the time period over which the quantity supplied is taken the more elastic supply is. This is a consequence of how the time period is defined. Supply is elastic if it is easy to transfer resources in production from other goods to the good in question. For example, companies that produce dinner plates also tend to produce coffee mugs. It is a relatively easy thing to produce more mugs and fewer dinner plates. A related question would be that of how easy it is for a company that does not produce dinner plates or coffee mugs to enter the market for either. This is concerned with entry barriers to the industry, and can be studied separately under market conditions. In other words, the market conditions affect the elasticity of supply, and the easier it is for companies to enter a market and produce a good or service, the more elastic the supply will be.
Contents of
Supply and Elasticity of Supply

1 Supply, the supply curve
2 Individual supply and market supply
3 Factors influencing the conditions of supply
4 Elasticity of Supply
5 Factors affecting elasticity of supply
6 Profits and supply, the housing market as an example

Related articles: (1) Costing, (2) Supply and Elasticity of Supply