Virginia family vacations for The shape of the supply curve, or the price-elasticity of supply (es), reflects TIME in the production process. Over the very short time, output cannot change, the supply curve is vertical, and supply is perfectly price-inelastic: es = 0. In the short run, over which producers can increase variable inputs such as materials and LABOR, supply is price-inelastic: es < 1, and in the long run, over which producers can increase plant and equipment, supply is price-elastic: es > 1. In the long run, firms can enter and exit a market, all of these firms facing the same costs.
Virginia Family Vacations Gallery Photos
Virginia Family Vacations
As a result, the long-run market supply curve will be more elastic than in the short run, and ultimately will be horizontal at the minimum of average total cost. This means that, when DEMAND for a good increases, the long-run result will be an increase in the number of firms and in the total quantity supplied rather than an increase in price. Empirical findings confirm that many supply curves are flat”showing great elasticity”over considerable ranges of output. Virginia family vacations 2016.