Question

What do you mean by elasticity of supply ? Explain its determinants

Answer 1

Elasticity mean hardness of a substance if elasticity is more sounds will propagate more fast

Answer 2

Answer:

Supply

• Supply means quantity of commodity offered for sale by a firm in the market at given time & price.

Determinants of supply:

1). Time factor: Longer the time period greater will be elasticity of supply because in long period supply can be increase upto any extent otherwise vise versa.

2). Cost of production: Supply also depends on cost of production. If cost of production increases, than it supply will fall otherwise vice versa.

3). Nature of commodity: Supply also depends on nature of commodity. If nature of commodity is durable can be increase otherwise vise versa.

4). Natural factors: The elasticity of supply also depends on climate condition of a region. Suppose we want to increase supply of popular than produce have to wait for 10 years to increase supply otherwise vice versa.

5). Technology: Supply also depends on technology. If the latest technology is used in production of goods and services than supply will increase otherwise vise versa.

6). Price: Supply also depends on price. A price of commodity rises than supply of good will increase in market otherwise vice versa.

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