ELASTICITY OF SUPPLY

Elasticity of supply

How responsive is supply to a change in price? Will supply change a lot when prices change or a little? Can you guess what it is called when supply changes greatly with price? When supply changes a little with price?

Elasticity of supply Elastic Supply Inelastic

supplybig change

little changein supply in

supply

Elasticity of supply

Elastic Supply Can change supply

quickly to meet the demand of the consumer 1. made quickly 2. inexpensive to

make 3. using few

resources – that are readily available

Inelastic Supply Can not change

easily to meet the demand of the consumer 1. takes more time to

produce the product 2. takes more money

to produce the product 3. the resources are

not as available, maybe scarce

Examples – elastic or inelastic?

YOUR TURN!

Get with a partner and add your own elastic example and inelastic example!! Be ready with your example if I call on you to share!

Perfectly Inelastic

When you CAN NOT change supply!!Producers would like to make more available, but it is not possible.

EX – seats on an airplane