The price elasticity of supply measures the responsiveness of a change in price and the corresponding change in quantity supply.The elasticity of supply is a positive coefficient.This is because positive relationship between price and the quantity supplied.The determinant is Time Frame for the supply decision (long -run supply and short-run supply) and The quantity product increase,the cost will increase.

Time Frame for the supply decision

Long-run supply

The long-run supply is when the prices increases,the producer have long time to increase the product.For example,in the case of oranges,the long-run is the time to take new plantings to grow to full maturity-about 15 years.

Short-run supply

The short-run supply is the supplier can not increase to produced at the short time.This is response of the quantity supplied to a price change only when the technologically is good.The slope will upward because the faster change the quantity supplied in response in the price change.

The quantity product increase,the cost will increase

Increase the quantity product can make the cost high,the elasticity of the supply is small.The cost is increase because the quantity product are increases,this is the burden on manufacturers.The firm not enough money in this business activity,so the price will increase.

The price elasticity of supply is defined by the percentage change in quantity supplied divide by the percentage change in price.Does not have negative sign .The supply will always be positive.If more productive activity,the production will change faster if the cost change, it is because the time.After the price change ,the firm will not expand rapidly.If the demand increases,the equilibrium price rises and the equilibrium quantity increases.When the price increase from RM20 to RM30, the price is increase RM10 and the average price is RM25,the price already increase 40%of the average price.The quantity increases from 10 to 13 an hour.

Inelastic Supply

The price of the good or services is increase or decrease in the market will happen the ratio of quantity supply is less than the price.For example,when the price decrease 20%,the quantity supply just only increase 10%.The product like rice,if the price is decrease but the consumer just can eat 10KG in a month so can not buy more because will destroy.The Inelastic Supply Curve is a oblique curve.

Elastic Supply

The Elastic Supply Curve is a flat curve,the elasticity of supply is big which is Es > 1, % change in quantity > % change in price.For example,Mercedes S-class is a high-tech car and the price is expensive.Just only the rich people can spent money to buy this kind of car.The price of the car is more expensive that can show off how rich you are.

Unit Elastic Supply