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 ?
NW] denotes the labor supply elasticity with respect to the real wage, [[zeta].
We find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work - ie, we find no evidence of adverse selection effects on motivation; higher wage offers also increased acceptance rates, implying a labour supply elasticity of around 2 and some degree of monopsony power.
Studies also report estimates of labour supply elasticity by gender and income, or by gender and skills.
Remarkably, little empirical work has been conducted to verify this prediction and examine whether the pass-through to consumers is altered by changes in supply elasticity.
The supply elasticity of following firms can be derived with use of the following identity.
10) Other estimates indicate an even more dramatic increase in labor supply elasticity over age.
For our sensitivity analysis, we reset the parameters in the utility functions of potential and actual illegal workers so that their long-run supply elasticity is about 1.
This is surprising, given that recent theoretical and empirical evidence suggests low housing supply elasticity may play an important role in the emergence of market bubbles and decreased housing affordability (Berry and Dalton, 2004; Glaeser, 2006; Glaser, Gyourko, and Saiz, 2008).
where LQP is the production volume of Chinese plywood, LWFQ is the production volume of Chinese wooden furniture, LEPR is the real export price of Chinese plywood, LIPR is the real import price of Chinese logs, a is a constant, b is supply elasticity with respect to the production of Chinese furniture, c and d are, respectively, the plywood price elasticity and the log price elasticity of supply, u is an error term, and t represents time.
This effect, known as efficiency/deadweight loss of the tax, can be measured: as such, the formulae used for this must take into account the influence of demand, respective supply elasticity over the real economy, since those elasticities practically materialize the (increased) fiscal pressure, modifying, consequently, the real economy (Lipsey&Chrystal, 1999).
In contrast, the pricing structure observed in the soil carbon sequestration case is consistent with the participation elasticity and the inframarginal supply elasticity being roughly the same.
The model has a basic neoclassical substructure but allows for non-neoclassical features such as a high labor supply elasticity and a countercyclical markup.