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InterviewSolution
| 1. |
What is elasticity of supply |
| Answer» It is the degree of responsiveness of the commodity within its own change in price.<br>We have been studying the impact of price on supply. However, all these definitions have been qualitative. With this in mind, the price elasticity of supply came into existence. The price elasticity of supply tackles the quantitative side of the price and supply relationship.It refers to the degree of responsiveness of supply of a commodity with reference to change in the price of such commodity. Note that the price elasticity of supply is always positive. This happens because\xa0of the positive or direct relationship between price and supply, unlike demand. | |