What are the determinants of the price elasticity of supply?

There are six determinants or factors in the price elasticity of supply. First, the time period is important in determining the price elasticity of supply. If producers have longer periods of time to adjust their production schedules and plans, the price of that product can change more quickly and be larger. Less time, on the other hand, means that producers have no real ability to change their production schedule or plans.

The second factor is the ability to store the output of the supply. Perishable goods will not last long and thus can not be produced in larger numbers without serious losses.

The third factor is factor mobility, or how easy it is for a supply network to move factors of production from one product to another to increase supply, as this will help determine price elasticity.

The fourth factor is changes in the marginal cost of production, or how much the marginal cost of production increases relative to the marginal return on products. If items or commodities become too expensive as more units are produced, then it would not make sense to continue producing it in the long run.

The fifth factor is excess supply; if there are too many products being produced in the first place, it is easier for producers to expand production when prices rise, than in cases where there is no surplus production and factories are at full utilization.

The sixth factor is availability of infrastructure facilities. In situations where there is ample transporation infrastructure, it is easier to increase output and supply.

What factors determine the Price Elasticity of Supply:

The price of products frequently changes on the market. Sometimes, the prices of the supply of products change quicker or in relatively larger degree than at other times. The change in the quantity supplied at different prices is known as the 'elasticity of supply'.