Question

Discuss two factors that determine the elasticity of supply.

Answer 1

Dear student,
The following are two of the factors affect the price elasticity of supply:

1. Nature of commodity: The Price elasticity of supply is affected by the nature of commodity. Goods that are perishable in nature have an inelastic supply. This is because their supply cannot be changed in a short period of time.
2. Time Period: The supply tends to be more elastic in the long run than in the short run.

Regards