The price elasticity of supply

The price elasticity of supply measures how much the quantity of a good or service that producers are willing to supply changes when the price changes. If supply is highly elastic, a small increase in price leads to a large increase in the amount supplied, making it flexible to price changes. If supply is inelastic, even a big price increase doesn't significantly boost production, indicating limited responsiveness. This concept helps understand how quickly producers can respond to market fluctuations, influencing decisions on pricing and production strategies.