Asked by Mireille Mathieu Ebode Nkoudou on Jun 30, 2024
Verified
What is the main determinant of the price elasticity of supply? Explain.
Main Determinant
The primary factor or condition that influences an outcome or result.
Price Elasticity of Supply
The measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price.
- Identify the main determinant of price elasticity of supply and its implications.
Verified Answer
ZK
Zybrea KnightJul 02, 2024
Final Answer :
The main determinant of price elasticity of supply is time. The less time available to the producer, the more inelastic the good is; the more time the producer has to respond to the price change, the more elastic the good is. In analyzing the impact of time on elasticity, economists distinguish among the immediate market period, the short run, and the long run.
Learning Objectives
- Identify the main determinant of price elasticity of supply and its implications.