What Are the Determinants of the Price Elasticity of Supply

question 112

Essay

What are the determinants of the price elasticity of supply and how does each affect elasticity?
Price elasticity of supply depends on the flexibility of sellers to changes in price. For resources like land of a specific type and location, there is practically no flexibility. For manufactured products, there is greater flexibility. In most markets, the time period over which supply is measured is a key determinant. Over short time periods, supply curves tend to be less elastic and over longer periods, supply curves tend to be more elastic.

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Definitions:

Mutual Trust

A reciprocal belief between parties that each will act in the interest of the other, essential for collaboration and teamwork.

Role Ambiguity

The lack of clarity about expected behavior, responsibilities, and tasks in a job role, leading to confusion and stress.

Discretionary Action

Actions that rely on individual judgment and choice in the execution of a duty or the handling of a situation.

Role Conflict

Occurs when an individual faces incompatible demands or expectations from different roles they are required to perform.