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  Factors Affecting Elasticity of Supply Homework Help

Factors Affecting Elasticity of Supply are as follows

a)      Length of Production Process

Goods which can be produced speedily like manufactured products will have elastic supply whilst commodity that needs longer period to of time produce like primary products will have inelastic supply.

b)     Capacity Level

A firm which is not utilising all the resources will be able to adjust its supply in the respond to any price changes and therefore will have elastic supply.

c)      Degree of Factor Mobility

Factors of production which can be simply transferred to the other places or uses will result in supply of its final product to be much more elastic.

d)     Barriers to Entry of Firms

Any forms of the barriers or hurdles to entry (legal, natural or political) will prevent supply from adjusting to any cost changes and therefore will result in the supply being inelastic.

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