Question

Give reasons "With a slight change in the price, if supply varies in a greater proportion then supply is said to be relatively elastic".

Answer 1

Supply is that part of stock, which is actually brought into the market for sale at, a particular time and price. Supply is the flow out of stock. So stock is the source of supply.

Supply refers to quantity of a commodity that a seller (firm) is willing and able to offer for sale at a particular price, during a certain period of time. For example, suppose a farmer produces 2000 kgs. of rice. This is his total stock. At Rs. 30 per kg., if he offers 800 kg. rice for sale at a given period of time. That 800 kg. rice is his actual supply.

Answer 2

With a slight change in the price, if supply varies in a greater proportion then supply is said to be relatively elastic because

• At the point when the stock pile of a decent is profoundly receptive to the adjustments in Es value, the inventory of that great is said to be generally flexible.
• At the end of the day, with a slight change in the cost, if supply fluctuates in a more prominent extent, the stockpile is said to be generally versatile.
• In this case the rate change in the inventory is more prominent than the percentage change in the cost. Consequently, the estimation of value latchkey of supply is more noteworthy than one i.e, E ≥1.