What is the importance of price elasticity of supply?

Open in App

Solution

The elasticity of supply estimates the responsiveness of an adjustment or a change of the quantity provided to an adjustment/ a change of cost. In the event that cost increases, then the firms perceive it to be more productive to supply a decent amount of quantity products. So an increase in price prompts higher stock.

Stay tuned to BYJU’S to learn similar Commerce Questions.

Suggest Corrections

Similar questions

What does the price elasticity of supply mean? How do we measure it?

What is the importance of elasticity of demand in the case of factor pricing?

Q. Which of the following points underlines the importance of elasticity of supply?

At the market price of Rs.10,a firm supplies 4 units of output.The market price increased to Rs.30.The price elasticity of the firm supply is 1.25.what quantity will the firm supply at the new price?

At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?

Join BYJU'S Learning Program