How does elasticity of supply vary with time for most goods? How is this different for goods that are durable and can be recycled?
The elasticity of supply measures the responsiveness of supply to the change in the price level. The time factor has a strong bearing on the elasticity of supply. Over the long run, the firm can adjust its supply according to demand in the market. Hence, supply is relatively more elastic over the longer time horizon. But over the short run, supply can not be easily changed according to changes in demand. hence, supply is inelastic over the short run.
On the other hands, Supply of durable good and that can be recycled is elastic. The firm tends to increase supply considerably even if demand is low since the firm knows that demand might pick up any time and inventory can be stored up for long period of time.
How does elasticity of supply vary with time for most goods? How is this different for...
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25) What is measured by the price elasticity of supply? A) The price elasticity of supply measures how responsive producers are to changes in the price of other goods. B) The price elasticity of supply measures how responsive producers are to changes in income. C) The price elasticity of supply measures how responsive producers are to changes in the price of a product. D) The price elasticity of supply is a measure of the slope of the supply curve. E)...
Compare and contrast the price elasticity of supply and price elasticity of demand, and define income elasticity and how it distinguishes normal and inferior goods.
Compare and contrast the price elasticity of supply and price elasticity of demand, and define income elasticity and how it distinguishes normal and inferior goods.
How does increasing the amount of time that a consumer has to purchase a good effect the price elasticity of demand for that good. Fully explain. How does increasing the amount of time that a form has to sell a good effect the elasticity of supply? Fully explain.
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