As discussed earlier, the price elasticity of demand of a product reflects the change in the quantity demanded as a result of a change in price. Factors Affecting Price Elasticity of Supply. The following are the main factors which influence the price elasticity of supply: Time Period. Elasticity of supply is a measure of a producer's ability to cope effectively with changes in demand.

Air travel and train travel are weak substitutes for inter-continental flights but closer substitutes for journeys of around 200-400km e.g. A number of factors can affect it. Factors affecting price elasticity of demand. As a general rule, the more easily factors can be transferred from the production of one good to that of another, the greater the elasticity of supply. Nature of the Good 5. However, the price elasticity differs for different products as it depends on various factors. An important part of understanding an economy is learning how the supply and demand of a good or service (an output) reacts to key economic factors.

The following points highlight the five main factors affecting the elasticity of supply. Length of Time.

Probability that the Price would Change in Future 3. Factors Affecting Price Elasticity of Demand. Price of the Good 2.

If supply is elastic, producers can increase output without a rise in cost or a time delay. The factors are: 1.

Conditions Regarding Cost of Production 4. Factor # 5. between major cities in a large country. The number of close substitutes – the more close substitutes there are in the market, the more elastic is demand because consumers find it easy to switch.E.g. Several factors come in to play, affecting demand and supply in various positive and negative ways. Factors # 1. Below are the factors that exert the greatest influence on the demand elasticity of a product or service. The Definition of the Commodity: As in the case of demand, elasticity of supply also depends on the definition of the commodity. If supply is inelastic, firms find it hard to change production in a given time period. Type of Good There are three types of goods, necessity, comfort, and luxury goods. What is Elasticity? Availability of resources is a factor.