Factors affecting Supply
The longer the time period to increase production,
the more elastic the supply will be.
Seller of fresh vegetables-
Supply cannot increase production in a day or even
Supply is inelastic and remains so until more
vegetables can be planted, harvested and brought to
Ease of Storage
When the price of a product drops, sellers have two
They can either sell the product at the new price or
put it into storage until the price increases again.
Steel industry enjoys high supply elasticity because
it is easy to store steel.
Agricultural industries have low supply elasticity
because it’s difficult to store large quantities of
produce for an extended period.
Increasing supply may be costly depending upon the
Car manufacturers may be able to increase supply in
the short term by requiring workers to put in more
A permanent increase in production may be much
more costly because a new factory may have to be
CYU page 101 Questions 1 and 2