How quickly can a business react when prices rise?
In short: This video introduces price elasticity of supply, a fundamental microeconomic concept used to measure how sensitive the quantity of a good produced is to changes in its market price.
The lesson explores how firms—individual decision-makers in an economy—respond to shifting incentives. By calculating the percentage change in quantity supplied relative to the percentage change in price, economists can gauge production flexibility.
This concept is a core component of AP Microeconomics, which examines how market structures and costs influence outcomes like profit maximization and competition.
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Sources
- Summary by Intellect · source: Introduction to price elasticity of supply | APⓇ Microeconomics | Khan Academy
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