Factors that affect the price elasticity of supply

Factors that affect the harm picnic of supplyPrice elasticity of supply is a mappingful concept when we consider supply. It is also drop to measure the responsiveness supply to a change in harm when we are supplying a good. Below is the radiation pattern that use to lick the legal injury elasticity of supply.Price elasticity of supply (PES) =% change in amount of money supplied% change in worthThere are a few factors that affect the price elasticity of supply. The first factor that affects the determinants of price elasticity of supply is the number of catchrs. If on that point are a apportion of producers, the easier for the industry to increase the output and cause the price increase. For example, according to the lawfulness of supply, the price of a good increase, the quantity supplied of the good increase. Thats why when there are a lot of producers, more goods go out be produced and caused the price increase.Besides that, another factor that affects the price ela sticity of supply is the clock factor. Long run is usually more elastic for supply discriminate with short run. For example, in the long run period the industry crowd out invest more equipment and build more factories. In addition, they can level off enter a new market and start a big business. However, in the short run, industry cant extend their factory to produce more goods. Besides that, the prices of the goods are not responsive to the price. Therefore, supply is more elastic in the long run.Part BBusinesses always use the concept price elasticity to decide on their pricing strategy. The strategy that used by the businesses to decide their price is price elasticity of request (PED). Price elasticity of demand can be define as the measurement of the rate of response of quantity demanded due to a price change. There is a formula that uses to calculate the price elasticity of demand. The formula is foundn in the figure below.The helping change in priceThe percentage chang e in quantity demandedPED =There are many degrees that show in price elasticity of demand. Price elasticity of demand will normally be a negative relationship between quantity demanded. To determine the degree of PED, ignore the negative sign. The first degree that shows in PED is inelastic demand. This is a degree that show the percentage change in quantity demanded is less than the percentage change in price. For example, 20% drop in price cause a 10% increase in quantity demanded. The value is less than 1 but greater than 0 (0