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 ?
Table 1.--Description of moderators used to characterize heterogeneity in price elasticity of supply. Moderators Description Forest product Materials derived from forests for direct consumption or commercial use Region Areas that have generally similar timber markets (classified as Asia, Europe, and North America) Econometric model form Function form used to build the relationship between timber supply and associated factors including: linear, log-linear, and log-log Data type Types of data include: 1.
Similar results occur when the price elasticity of supply becomes less elastic.
(6) The baseline scenario is one in which initial market shares are maintained (38 per cent for OPEC) over the projection horizon and the non-OPEC price elasticity of supply is assumed to be in the middle of the range of estimated elasticities.
For example, from Table I, the price elasticity of demand is -2.8 and the price elasticity of supply is 4.4 for green peas.
where [E.sub.s] is the price elasticity of supply at point H (Figure 1C), and the other terms are as defined earlier.
The price elasticity of supply has the greatest impact, reflecting a lower competitive price under more inelastic supply conditions.
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.
where [eta].sub.ij] = ([partial derivative][p.sub.i]/[partial derivative][Q.sub.i]) x ([Q.sub.j]/[p.sub.i]) is the price elasticity of demand for meat i with respect to the quantity demanded of meat j and [[epsilon].sub.i] = ([partial derivative][Q.sub.i]/[partial derivative][w.sub.i]) x ([w.sub.i]/[Q.sub.i]) is the retail industry's price elasticity of supply of meat i measured at the meat processors level.
Long-run income elasticity bounds are 1.0 and 1.5.(31) We also impose certain well-founded priors: that the price elasticity of supply is between zero and infinity.
"The Long Run Price Elasticity of Supply of New Construction in the United States and the United Kingdom." Paper presented to the European Network for Housing Research /American Real Estate and Urban Economics Association Conference, Glasgow.
where [Q.sub.j2] is determined by using the formula for 'cross-price elasticity of supply for the ith and jth commodities; and [e.sup.s.sub.j] the own price elasticity of supply of jth commodity.
The coefficients to the price variables are short term elasticity coefficients.(1) Of particular interest is [b.sub.1], which is the estimated short-term price elasticity of supply for commodity i.