ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The PES of a product can vary depending on the time frame considered. In the short run, the supply of some goods may be more inelastic due to limited production capabilities, while in the long run, the supply may become more elastic as businesses have time to adjust production and increase supply.

Detailed explanation-2: -Supply is price inelastic if the price elasticity of supply is less than 1; it is unit price elastic if the price elasticity of supply is equal to 1; and it is price elastic if the price elasticity of supply is greater than 1. A vertical supply curve is said to be perfectly inelastic.

Detailed explanation-3: -Time also exerts considerable influence on the elasticity of supply. Supply is more elastic in the long run than in the short run. The reason is easy to find out. The longer the time period the easier it is to shift resources among products, following a change in their relative prices.

Detailed explanation-4: -Supply is price inelastic if a change in price causes a smaller percentage change in supply. In this case, an increase in price from £30 to £40 has led to an increase in quantity supplied from 15 to 16. With a PES of 0.2, it is inelastic because PES is less than one.

Detailed explanation-5: -Supply is said to be perfectly inelastic when the price elasticity of supply is zero (0).