Which of the following is not a determinant of price elasticity of supply?

Which of the following is not a determinant of price elasticity of supply?

• A. Availability of inputs
• B. Brand loyalty
• C. Adjustment time
• D. Feasibility of storing it

Answer: (B)

Price elasticity of supply shows how much the quantity firms are willing to supply changes when price changes. It depends on factors that affect a firm’s ability to adjust output: how easily inputs are available (easy access lets production expand more in response to price rises), how much time firms have to adjust (in the short run there are limits to changing output, while the long run allows more adjustment), and whether the product can be stored (if stockpiling is possible, producers can release more supply when prices rise). Brand loyalty, on the other hand, relates to buyers’ responsiveness to price and affects demand, not how supply responds. So brand loyalty is not a determinant of price elasticity of supply.

Price elasticity of supply shows how much the quantity firms are willing to supply changes when price changes. It depends on factors that affect a firm’s ability to adjust output: how easily inputs are available (easy access lets production expand more in response to price rises), how much time firms have to adjust (in the short run there are limits to changing output, while the long run allows more adjustment), and whether the product can be stored (if stockpiling is possible, producers can release more supply when prices rise). Brand loyalty, on the other hand, relates to buyers’ responsiveness to price and affects demand, not how supply responds. So brand loyalty is not a determinant of price elasticity of supply.