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 ?
Using the demand supply elasticity model it is expected that about 30% of the private vehicular demand plus some of the existing demand on the buses will divert to metro system.
where [mathematical expression not reproducible] is the labor supply elasticity.
From this example, it is easy to see that, if labor supply elasticity is high, workers work significantly less or put in significantly less effort when the tax rate is raised.
Such increases have spurred a series of recent articles that examine general housing supply elasticity in Australia's metropolitan areas (McLaughlin, 2012), the impact of metropolitan-level growth policies on new supply (McLaughlin, 2011), and supply elasticity within a metropolitan area (Gitelman and Otto, 2012).
In Wen's model, the threshold value of the returns-to-scale parameter is a function of the labor supply elasticity.
But in that computation, market share was 78 %, demand elasticity was set at the weighted average of the lowest values from the studies surveyed, and supply elasticity was set at 1.
To capture the effect of labor mobility, we consider high labor supply elasticity as a special case.
A positive value of the benefit of variety [zeta](AQ implies that labor is lower in the competitive allocation than in the First Best allocation for a positive and finite labor supply elasticity q.
Although they encourage readers to exercise caution in applying their findings to other countries, their work suggests "that the work capacity and labor supply elasticity of DI recipients in Norway are comparable to those of DI recipients in the U.
12) Following his analysis, labor supply elasticity became a key policy guideline to measure the behavioral response to taxes.
As a value for short-run supply elasticity, the result is reasonable.
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.