What characteristics affect supply elasticity? Can we predict whether a product will be elastically or inelastically supplied, based on its nature?
Before we tackle these questions, let's consider what it means for a good to be elastically supplied.
When suppliers respond strongly to price changes, a good is elastically supplied. This means that the quantity that is available for
sale can be easily increased or decreased rapidly, and that firms
wish to do this. If not, the good would be inelastically supplied.