Editing Price elasticity of supply (section)

== Definition & Real-Life Example ==
The slope of a supply curve relates changes in price to changes in quantity supplied. A steeper curve means that price changes are correlated with relatively small quantity changes. Steep supply curves derive that the quantity supplied by producers are not particularly sensitive to price changes. Oppositely, flatter supply curves imply that price changes are associated with large quantity changes. Markets with flat supply curves will see large movements in quantity supplied as prices change.<ref name=":0">{{Cite book |last1=Goolsbee |first1=Austan |title=Microeconomics |last2=Levitt |first2=Steven |last3=Syverson |first3=Chad |publisher=Worth Publishers |year=2020 |isbn=9781319306793 |edition=3rd |location=New York, NY |pages=797d - 797k |language=English}}</ref>

The concept of elasticity expresses the responsiveness of a value to changes in another (particularly, responsiveness of quantities to prices). An elasticity is the ratio of the percentage change in one value to the percentage change in another. The concept of [[Elasticity (economics)|elasticity]] applies to [[demand]] and [[Supply (economics)|supply]] curves and agents like producers and consumers.<ref name=":0" />


<math>E^S =\left ( \frac{%\bigtriangleup Q^S}{%\bigtriangleup P} \right )</math>


Suppose that there is an increase in demand for apartments. There will be a shortage of apartments at the old level of apartment rents and pressure on rents (price) to increase. [[Ceteris paribus]], the more responsive (elastic) the quantity of apartments supplied is to changes in monthly rents, the lower the increase in rent required to eliminate the shortage and to bring the market back to equilibrium. Conversely, if quantity supplied is less responsive (inelastic) to price changes, price will have to increase more to eliminate a shortage caused by an increase in demand.<ref>{{Cite journal |date=2016-06-17 |title=5.3 Price Elasticity of Supply |url=https://open.lib.umn.edu/principleseconomics/chapter/5-3-price-elasticity-of-supply/ |journal= |language=English}}</ref>