Elasticity of Supply

Elasticity of supply measures how responsive producers are to changes in the market price of a good or service. If the price increases and producers can quickly increase their output, the supply is considered elastic. Conversely, if production cannot easily be ramped up, supply is inelastic. For example, a farmer can grow more vegetables if prices rise, but a construction company may take longer to increase building output due to fixed resources. Understanding elasticity helps assess how market changes can affect production levels and availability of goods.