these two extremes, elasticity of supply varies with the shape of the
supply curve.
Determinants of Supply Elasticity
Because much of the treatment of demand elasticity carries over to supply
elasticity, we can cover the main points quickly.
Ease of Substitution
The ease of substitution can vary in production as well as in consumption.
If the price of a product rises, how much more can be produced
profitably? This depends in part on how easy it is for producers to shift
from the production of other products to the one whose price has risen. If
agricultural land and labour can be readily shifted from wheat to canola,
for example, the supply of each crop will be more elastic than if they
cannot. Or if a factory that produces snowmobiles can easily be refitted to
produce Jet Skis, then the supply of each product will be more elastic than
if the factory and equipment could not be easily modified. We will see in
Chapter 7 that the ease of substitution in production is closely related to
the firm’s technology.
Short Run and Long Run
As with demand, length of time for response is important. It may be
difficult to change quantity supplied in response to a price increase in a
matter of weeks or months but easy to do so over years. An obvious
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