Determinants of Price Elasticity of Supply:

The price elasticity of supply also varies widely across different products. Some products have more elastic supply while others have less elastic supply. The major factors that determin price elasticity of supply are:

i) The Availability and Bobility of Factors of Production

If factors of production are available then supply respons quickly and largely to a change in the price of a product (i.e. supply then tends to be more elastic) but less elastic (inelastic) when factors transferred from the production of one good to that of another, the greater the elasticity of supply.

ii) Inflence of the Weather

If output is controlled by wether conditions, as in the case of agricultural products, the output cannot be controlled by the produer. Hence the supply of such product tends to be less elastic (inelastic).

iii) The level of Technology

The extend to which output can be increased depends on the level of technology employed by the producer. Advanced technology used in production tends to make the supply of a product more elastic.

iv) Costof Production

If the cost involved in the production of a product is very high, output cannot be easily increased when the market price increases unless the increase in price is great enough to absorb the cost.

v) Degree of Perishability

The supply of highly a perishable commodity is relatively inelastic and that of a less perishable commodity is relatively elastic. The explanation is that

highly perishable goods cannot be stocked for longer period to be released when price for instance rises.

vi) Time (Gestation Period)

Supply elasticity to be greater in the longer period. The longer the period, the easlier it is to shift factors of production among products, following a change in their relative prices. This holds for agricultural products, because of the natural time lag between planting andn harvesting of crops. In the short-run, the supply of most products tends to be ralatively inelastic.