Question

Classify supply elasticities and explain how the length of time for adjustment affects the price elasticity of supply

Short answer

The concept of how time length affect the price elasticity of supply is explained and the supply elasticities are classified

Step-by-step solution

Introduction 

The responsiveness of a good or service to a change in its market price is measured by price elasticity of supply.

Classify supply elasticities

The percentage change in quantity supplied divided by the percentage change in price is the price elasticity of supply.

Perfectly elastic, elastic, perfectly inelastic, inelastic, and unitary are the five broad categories of elasticities.

Explanation of how time length affects the price elasticity of supply

The amount of time it takes producers to respond to price fluctuations is critical to supply elasticity. Supply will be more elastic if the price of an output rises and producers have time to adjust supply.

The supply is inelastic if producers are unable to respond to the price increase. Supply may be inelastic in the short term. However, if given more time to respond, supply elasticity may improve.