The factors that influence price elasticity of supply
Several factors determine how easily producers can increase output when prices rise. These factors make supply either elastic — very responsive — or inelastic — barely responsive.
Real World
A commercial bakery with unused ovens can rapidly increase bread output if bread prices rise — its spare capacity makes supply elastic. A vineyard, by contrast, cannot harvest more grapes mid-season regardless of price.
Exam Focus
For each factor, state its direction of effect and the reasoning: 'X makes supply more inelastic because…' — don't just list factors.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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