Question

Give an example of a good that has elastic supply. What is the value of the price elasticity if supply is elastic? Give example of a good that has inelastic supply. What is the vaule of the price elasticity if supply is inelastic?

Answer 1

Durable goods or manufactured goods generally has elastic supply.

So,

Furniture is an example of a good that has elastic supply.

The value of price elasticity of supply would be greater than 1 if supply is elastic.

Perishable commodities or commodities whose production depends on natural factors such as weather, rain etc. generally has inelastic supply.

So,

Wheat is an example of a good that has inelastic supply.

The value of price elasticity of supply would be less than 1 if supply is inelastic.