Define the price elasticity of supply.

Explain why the the price elasticity of supply might be different in the long run than in the short run?

The price elasticity of supply is a measure that quantifies the sensitivity of quantity supplied of a product to variations in the price. Time horizon is an essential determinant of the price elasticity of supply. Usually, the supply of a good or service is more elastic in the long run compared to the short run. In the short term, the producers cannot easily vary the size of their plants to create less or more of a good. As a result, in the short run, the quantity supplied is not very sensitive to the price. However, in the long term, new firms can come into the market, some firms can leave the market, and producers can establish new plants. Hence, the quantity supplied is very sensitive to price variation in the long run.