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Economics IGCSEPDF 38
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• Grapes – Harvest is once a year, so in short-term, supply would be very inelastic.
• Flood defences – If there is heavy rainfall and flooding, there would be high demand for flood
defences. But, to supply barriers against the floods cannot occur overnight. It will take many
months of construction to build.
•
: If the product can be quickly produced, it will have a price elastic supply
as the product can be quickly supplied at any price. For example, juice at a restaurant. But
products which take a longer time to produce, such as cars, will have a price inelastic supply as
it will take a longer time for supply to adjust to price.
• Availability of resources: More resource (land, labour, capital) will make way for an elastic
factory.
• If it is difficult to employ factors of production, e.g. if highly skilled labour is needed
• With agricultural products, supply is inelastic in the short run, because it takes at least six
months to grow new crops. In September the farmer cannot suddenly produce more potatoes if
the price goes up.
What affects PES?
Time ofproduction
Examples of goods with inelastic supplyNuclear reactors – It takes considerable time and
expertise to build a new reactor. If there is high demand, few firms would be able to
increase output in quick time