Tag: supply - law of supply and price elasticity of supply

The five degrees of elasticity of supply are: perfectly inelastic, relatively inelastic, unitary elastic, relatively elastic, and perfectly elastic.

When with a minute change or without any change in price, supply may change to any extent, then the supply is Perfectly elastic

This is because if the goods are less perishable, the demand will be lower and hence supplier has lesser power to deviate price. 

Anything that affects the price of a product will affect the price elasticity of supply. Here all factors affect the supply hence option D is correct.

This specific definition is attributed to Prof. Bilas in standard economic textbooks regarding the theory of supply.

Elasticity of supply is influenced by various factors including the nature of inputs, natural constraints, production technology, and the nature of the commodity itself.

When a change in price results in zero change in quantity supplied, the supply curve is vertical, representing perfectly inelastic supply.

it means that any decrease in the product price would immediately cause the supply to shift to zero.
Algebraically, it means that the elasticity of a good or service (the percentage change of quantity / the percentage change of price) equals to infinity.

Elasticity of supply can be measured using the percentage (proportionate) method, which uses numerical values, or the geometric (diagrammatic) method, which uses the slope of the supply curve.

The supply of agricultural products is generally inelastic that means proportionate change in quantity demand is lesser than the proportionate change in price as agricultural products are necessities since it provides basic subsistence to people.