in several videos we have talked already about the price elasticity of supply in this video we're going to dig a little bit deeper we're going to think about what factors might make a supply curve or Supply schedule or portions of it to be more elastic or inelastic so we'll think about the determinance of the price elasticity of supply and to help us think about that I've drawn two different Supply curves and so remember price elasticity it's thinking about how sensitive is the quantity or the price elasticity of supply we're thinking about how sensitive is a percent change in quantity supplied to a percent change in price so for example if we were to go from this price to this price it's a pretty significant percent change in price it looks like about a 50% change in price but if we look at this supply curve where it's getting pretty vertical it's not quite vertical yet but it's getting pretty steep our percent change in quantity is going from here to here so it's not as atic so these parts of the curve that are relatively steep as they're approaching more and more vertical we would consider those to be relatively inelastic if you had a perfectly vertical or portions of this curve that were perfectly vertical at Those portions you would say that you have perfect inelasticity and then if on the other hand in this example if we were to change our price from say this to this that's a relatively small percent change in price but notice it could result in a fairly large percent change in quantity supplied we're going from this to this so when we are more horizontal or the flatter our supply curve is that would be we're we're talking about relative elasticity or we are much more elastic here than we are there so elastic and if you were perfectly horizontal then you would have a perfectly elastic part of our supply curve or our supply schedule now what would cause what are the factors that would make get more in elastic or more elastic well let's think about a situation let's say we are in this world let's say we are in the world starting at this price where this is our quantity imagine that the factories that produce whatever good we're talking about here they're already at full production and to have to make more production would take a lot of time or they might not even be the resources to have more production uh maybe the people who make the factories are doing other things right now maybe maybe you have other resources other inputs into your production that there's just not more of maybe uh oil is as much oil in the world is being produced and that's an input into production and so in that world even if the price is even if the price goes dramatically up people might want to produce a lot more quantity but they just can't they they don't have more factories or they don't have more inputs to produce them so the quantity might go up a little bit they might run the factory uh they might they might run the factories in overtime or the the people who are trained to do that skill and maybe there there there just aren't a lot more people who can do that skill they're working overtime but they can't produce a lot more and so a couple of things that we can glean from that example is this inelasticity of Supply tends to happen in the short run when in the short run you're not going to be able to build a new Factory in the short run you're not going to be able to find more sources of let's say oil in the short run you're not going to be able to train a lot more people to produce a lot more in the short run so if we're talking about a supply curve that's describing more of a short run time frame then it tends to be more in elastic and then the other thing is and we already talked about this is there's not available resources or not a lot of available resources not a lot of available available resources once again your factor is operating full out you've hired everyone who can produce that thing you're producing or some natural resource uh that you need as an input into to make this good well the world is already producing as much as they could well let's then go to the other situation what would cause elasticity well this could be a world where in the long run it might be easier to get more resources in the long run you can build more factories you can find and hire and train more people so the longer run that we are talking about that tends to lead to a more elastic supply curve in the longer run and then another notion here is that you aren't capacity constrained or maybe I should say aren't resource constrained aren't resource constrained so maybe our factories are running nowhere near capacity so even a small increase of price we like hey I'm going to just make my factories run a little bit more or there might be a lot of people who can uh help produce who have the skills to do to produce that good so as the price goes up more and more people are going to start producing that good or it might be using resources where there's no shortage of it where as the price even goes up incrementally people will just use more and more of that resource to provide more and more of that good