ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If the price of an output increases, and producers have time to adjust supply, supply will be more elastic. If producers are unable to respond to the price increase, the supply is inelastic. In the short-run, supply may be inelastic. However, given more time to respond, elasticity of supply may increase.

Detailed explanation-2: -Supply is normally more elastic in the long run than in the short run for produced goods, since it is generally assumed that in the long run all factors of production can be utilized to increase supply, whereas in the short run only labor can be increased, and even then, Page 2 changes may be prohibitively costly.

Detailed explanation-3: -Relatively elastic demand means that there will be more change in the quantity demanded of a good or service than in the price of that good or service. Perfectly inelastic demand means that regardless of price, the quantity demanded of a good or service remains constant.

Detailed explanation-4: -It is calculated as the percentage change in quantity supplied divided by the percentage change in price. If the elasticity is greater than one, supply is considered “elastic, ” while if it is less than one, supply is “inelastic."