supply elasticity

Supply elasticity measures how much the quantity of a good or service that producers are willing to supply changes in response to a price change. If supply is elastic, a small increase in price leads to a large increase in the quantity supplied, meaning producers can quickly adjust their output. If supply is inelastic, even significant price changes result in little or no change in the amount supplied, often due to production constraints. Understanding supply elasticity helps businesses and policymakers predict how supply might respond to market shifts, influencing pricing strategies, inventory decisions, and economic policies.