Elastic supply refers to a situation where there is a significant change in quantity supplied when there is a change in price. In other words, suppliers are highly responsive to price changes.
Imagine elastic supply like a rubber band. When you stretch it, it easily expands (increases supply) or contracts (decreases supply) based on how much you pull it.
Inelastic Supply: A situation where there is little to no change in quantity supplied when there is a change in price. Suppliers are not very responsive to price changes.
Subsidies: Financial assistance given by the government to producers, which can increase supply by reducing production costs.
Production Costs: The expenses incurred by firms during the process of producing goods or services, including labor, raw materials, and overhead costs.
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