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ELASTICITY ALTERNATIVES, SUPPLY: The price elasticity of supply can fall into one of five categories--perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic--based on the coefficient of elasticity. This table summarizes the five alternatives. These five elasticity alternatives form a continuum ranging from perfectly elastic at one end to perfectly inelastic at the other. The "middle" of this continuum is occupied by unit elastic. in that the "unit" and the two "perfectly" are really borders, boundaries, and endpoints, most of the real world action involving the price elasticity of supply takes place in the two "relatively" alternatives--relatively elastic and relatively inelastic.
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RELATIVELY INELASTIC An elasticity alternative in which relatively large changes in one variable (usually price) cause relatively small changes in another variable (usually quantity). In other words, quantity is not very responsive to price. Quantity does change, but not much, in response to large changes in price. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Relatively inelastic is one of five elasticity alternatives. The other four are perfectly elastic, perfectly inelastic, relatively elastic, and unit elastic.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads seeking to buy either yellow cotton balls or a set of steel-belted radial snow tires. Be on the lookout for pencil sharpeners with an attitude.
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This isn't me! What am I?
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The New York Stock Exchange was established by a group of investors in New York City in 1817 under a buttonwood tree at the end of a little road named Wall Street.
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"All things are difficult before they are easy." -- Thomas Fuller, Physician
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LCH
Life Cycle Hypothesis
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