What determines Werther the supply of a good or services is inelastic or elastic?

Length of time: In a short period of time, it can be difficult for a producer to expand
production
E.g.- PES<1 or Inelastic. Over time they can adjust/increases their factors of production so
they can produce more.
E.g.- over time PES becomes more elastic

Mobility of factors of production (Land; labor; Enterprise; Capital): how quickly can
factors of production can be repurposed from producing one good to producing
another good.
E.g. A farm worker- the price of wheat increases to shift production from corn to wheat is
simple. The farmer worker can easily change jobs to produce wheat instead of corn,
therefore price elasticity of supply is greater than one.
However, a factory worker may be more specialized changing jobs, a factory may require
more training--- PES<1

Spare (unused) capacity does the firm have- does the firm have machines working at
less than optimum
E.g., machine only used for 4 hours in the day—PES>1 or a school enrolling more students


Ability to store stocks of outputo Furniture PES>1 elastic
o Apples PES>1 elastic
o Strawberries PES<1 inelastic
Role at which cost increases) if the cost of increasing production increases rapidly,
the firms will be reluctant to expand production since they will want to avoid large
costs—PES<1 Inelastic, if cost increases slowly, it will be easier to expand
production—pes>1 ELASTIC.
PES in relation to primary commodities (raw materials, anything that comes under the
word land in the factors of production) and manufactured products
Why many primary commodities have a lower PES compared with the PES of manufacture
Goods.
Time need to adjust supply is long PES<1, SHIFTING RESSOURCES TO INCREASE
PRODUCTION IS DIFFICULT
e.g. Land is a scare resources
Building more capacity takes time
Primary commodity.
- Elastic
Manufactured goods
- Inelastic