What is the difference between factors that affect supply and the elasticity of supply?

Factors affecting supply will shift the supply curve in or out. These factors are costs of raw materials, technological advancements, wages. Factors affecting the elasticity of the supply curve will affect the steepness or gradient of the curve. These include, level of spare capacity- the more spare capacity, the more elastic the supply as firms can respond quicker to more changes in demand as they have the flexibility, level of stock- more levels of stock, more elastic the supply curve as firms have the stock to meet increase demand if needed so can respond quickly, time frame so the more time the firms have to respond, the more elastic, ease of switching/ availability of substitutes so if firms can easily change production using their resources then they can respond to changes in demand so the more elastic the supply curve.

Answered by Jennifer H. Economics tutor

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