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INDUCED GOVERNMENT PURCHASES: Government purchases that depend on income or production (especially national income or gross national product). An increase in national income triggers an increase in induced government purchases. Induced government purchases is graphically depicted as the slope of the government purchases line and is measured by the marginal propensity for government purchases. The induced relation between income and government purchases, as well as other induced expenditures, form the foundation of the multiplier effect triggered by changes in autonomous expenditures.
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                           INELASTIC SUPPLY: The general elasticity relation in which relatively large changes in price cause relatively small changes in quantity supplied. Large changes in price cause relatively small changes in quantity supplied or the percentage change in quantity supplied is smaller than the percentage change in price. This characterization of elasticity is most important for the price elasticity of supply. Inelastic supply is one of two general elasticity relations for supply. The other is elastic supply. An inelastic supply relation is NOT a very responsive, or stretchable, relation. The inelastic supply relation is most often directed toward supply in terms of the price elasticity of supply. In this context, supply is said to be inelastic if the percentage change in quantity is smaller than the percentage change in price. This means that sellers are not responsive to price changes.An inelastic supply relation can fall into one of two categories--perfectly inelastic and relatively inelastic. - Perfectly Inelastic: Perfectly inelastic means that quantity supplied is unaffected by any change in price. In other words, the quantity is essentially fixed. It does not matter how much price changes, quantity does not budge. Perfectly inelastic supply occurs when producers have no choice of the resources used in the production of a good.
- Relatively Inelastic: Relatively inelastic means that relatively large changes in price cause relatively small changes in quantity. In other words, quantity is not very responsive to price, but it does change. More specifically, the percentage change in quantity supplied is less than the percentage change in price. Relatively inelastic supply occurs when producers are able to switch resources among a small number of imperfect substitutes-in-production.
Recommended Citation:INELASTIC SUPPLY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 13, 2025].
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In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
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