1.2.2.5 Definition of elasticity of supply

Elasticity of supply is a concept in economics that measures the responsiveness of the quantity supplied of a good or service to changes in its price. In other words, it quantifies how sensitive producers are to changes in the price of a product and how they adjust their level of production in response to those price changes.

The elasticity of supply is an important counterpart to the more commonly discussed concept of price elasticity of demand (PED). While price elasticity of demand measures how consumers respond to changes in price, elasticity of supply focuses on how producers respond to price changes