Elasticity of supply refers to the degree of responsiveness of supply of a commodity to changes in its Price. Elasticity of supply measures the degree of responsiveness of quantity supplied to a change in own price of the commodity. It is also defined as the percentage change in quantity supplied divided by percentage change in price.
When demand is perfectly inelastic, an increase in price will result in
The cost on one thing in terms of the alternative given up is known as Opportunity cost. Opportunity cost is an economics term that refers to the value of what you have to give up in order to choose something else.
When equilibrium price rises but equilibrium quantity remains unchanged, the cause is
When equilibrium price rises but equilibrium quantity remains unchanged, the cause is supply decreases and demand increases. As price increases, it serves as an incentive for suppliers to increase supply and also leads to a fall in demand. It is important to realize that these processes continue to operate until a new equilibrium is established.
If demand is unitary elastic, a 25% increase in price will result in