elasticity of supply

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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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).
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
where [epsilon] and [delta] denote the price elasticity of market demand and the price elasticity of supply from the price leader's competitors.
Our assumptions regarding the elasticity of supply and demand were drawn from an assessment of the best estimates in the literature, but the labor markets may prove to be more or less elastic than our predictions.
Third, a shift in the price elasticity of supply of key commodities, ie, the responsiveness of output or quantity supplied to a change in prices.
In this type of cobweb, elasticity of demand is greater than elasticity of supply. The slope of supply curve is greater than the slope of demand curve; we get the case of damped oscillations.
In steady state, production is proportional to drilling, yielding the elasticity of supply from drilling data.
The oil market has been fixated on the elasticity of supply to prices, as the outcome will strongly determine how much longer a global surplus lasts.
The price elasticity of supply for groundnuts is inelastic and approximately 0.16 at mean value, with other factors held constant.
The study calculated a price elasticity of supply in the range of 0.27 to 0.34 for orthopedists and 0.57 to 1.26 for cardiologists.
The price elasticity of supply is found to be relatively high: a 10 percent increase in the price that homeowners are willing to pay for coverage results in a 27 percent increase in the number of policies supplied.
Specifically, using the estimated elasticity of supply and demand, that is, 0.20and -0.24 respectively and applying obtained relations in the theoretical bases section, welfare effects were computed.
Becker and his colleagues argue that more women than men currently go to college because women's elasticity of supply with respect to earnings is greater than men's.