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Elasticity of supply describes how a product's quantity affects its price. Milk, for example, has an elastic supply - the quantity goes up and the price goes down. Or, as the quantity is limited, the price goes up. Inelastic supply implies that availability does not affect price, such as with airplane flight tickets.
equilibrium price and equilibrium quantity?: equilibrium price: When the price is above the equilibrium point there is a surplus of supply The market price at which the supply of an item equals the quantity demanded Price at which the quantity of goods producers wish to supply matches the quantity demanders want to purchase sa madaling salita supply=demand=price equilibrium quantity: Amount of goods or services sold at the equilibrium price The quantity demanded or supplied at the equilibrium price. supply=demand ayos?
Because supply shock is a sudden change of a good. Meaning if it is a negative shock, the equilibrium price and quantity of course will go down. And if it is a positive shock, vice versa of negative.
a change in supply is the shift in supply curve due to change in price of other commodities and other factors like taste,weather,income e.t.c while a change in quantity supply is the change in price of the commodity itself that affect the quantity supply,here the supply curve remain constant but there will be a movement along the supply curve.
Supply determines the price and quantity of produced goods.
The importance of equilibrium price and quantity is that it creates a point where there is no pressure on the market to shift supply or demand. Suppliers supply exactly the quantity demanded.
supply elasticity
price rises and quantity increases
When price rises, the quantity supplied rises; as price falls, the quantity supplied falls.
It will be very sensitive to price change. A change in the price will change the quantity supplied by a factor greater than 1. ps: Price elasticity of supply= (% change in quantity supplied)/(% change in price)
Law of supply states that other factors remaining constant, supply is the function of its price where an increase in price of the commodity increases quantity supplied in the the market and a decrease in price reduces quantity supplied.
You have a situation of over supply, a "glut" and the price falls.