What does the elasticity of supply measure?

The elasticity of supply is a crucial concept in economics that measures how responsive the quantity supplied of a good or service is to a change in its price. When the elasticity of supply is assessed, it essentially indicates how much the quantity that producers are willing to sell changes when the price increases or decreases.

If suppliers can quickly adjust production levels in response to price changes, the supply is considered elastic. Conversely, if the quantity supplied does not change much with price changes, the supply is described as inelastic. Understanding this relationship helps economists and businesses predict how the market will react to various conditions, such as shifts in demand or external economic factors.

This concept is distinct from the other options, which focus on different aspects of market dynamics. The change in quantity demanded is related to consumer behavior rather than supplier responsiveness. Production costs can influence supply but are not the same as measuring the elasticity itself. Lastly, while stability in supply may reflect certain market conditions, it does not directly correspond to the elasticity concept, which is about responsiveness rather than stability.