elasticity of supply

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Elasticity of supply

The degree of producers' responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large value (greater than 1) of elasticity indicates sensitivity of supply to price, e.g., luxury goods, where a rise in price causes an increase in supply. Goods with a small value of elasticity (less than 1) have a supply that is insensitive to price, e.g., food, where a rise in price has little or no effect on the amount that producers supply.

Elasticity of Supply

The relative stability of a security's or product's supply in the face of increased or decreased price. Typically, an increased price results in greater supply because fewer people are buying the product; these products are considered inelastic. For example, Rolex watches are considered inelastic because a higher price results in fewer people purchasing the watches, which, in turn, results in an increased supply. On the other hand, staple products like food and clothing are considered elastic because an increased price does not necessarily lead to more supply. This is because people continue to buy food and (some) clothing. See also: Elasticity of demand.

elasticity of supply

the degree of responsiveness of quantity supplied of a particular product (see SUPPLY) to changes in the product's PRICE (PRICE-ELASTICITY OF SUPPLY).
References in periodicals archive ?
Consistent with the dollar peg, benign global inflationary environment, and elastic supply of foreign labour, inflation is projected to remain below three percent in the medium term.
He added that "the labor market structure in the GCC, with the majority of nationals employed in the public sector and the private sector reliant on an elastic supply of low-skilled expatriate workers, has enabled the region to develop rapidly so far, and keep inflation relatively low.
Despite the push for diversification across the GCC and their advantageous ability to alleviate bottlenecks through access to a perfectly elastic supply of foreign workers, hydrocarbon exports still overwhelm non-hydrocarbon exports, the bulk of which are energy-intensive and subsidised manufactures.
The trouble is that this is partly a global problem as increasing demand rubs up against insufficiently elastic supply.
Patience must reign during inevitable periods of unemployment, and an elastic supply of currency makes the situation worse--not better.
But in fact, because of the differential taxation of diesel (low tax) and gasoline (high tax) in Europe and the fairly fixed ratio of the two when crude is refined (in the absence of catalytic cracking), Europe has excess gasoline that is a source of elastic supply for the U.
The one-day conference, with the theme, "Managing uncertainty, developing more elastic supply," will provide an international meeting point and an ideal platform for meaningful interactions and networking among rubber industry players, policy makers, researchers and commodity analysts across the world, according to organizers.
The UAE has been able to use the elastic supply of labour available in neighbouring countries in its drive for economic diversification and growth, Gokkent added.
Tables 1(a) and 1(b) show how inflation affects long-term housing market outcomes in the model when there is no capital gains tax and there is an elastic supply of housing.
The best indicator of a bubble I know of is a wide and growing gap between house prices and fundamental production costs in a market with elastic supply.
Comparing the DWL shows that the DWL of the inelastic labor supply curve (ABC) is greater than the DWL of the elastic supply curve (AEF).
Reforms of the planning system which would improve the supply of housing would be welcome, not only because a more elastic supply would tend to moderate swings in house prices, but also because increased housing supply and associated lower prices would be highly desirable from a wider economic and social perspective,' the report continued.