low elasticity of supply
Quick Summary
In economics, the "low elasticity of supply" refers to a situation where the quantity of a good or service that producers are willing to offer is not very responsive to changes in its price. This means that even if the price increases significantly, the supply will only increase by a small amount, and vice versa.12
This inelasticity can occur due to several factors, such as the availability of raw materials, the complexity of production processes, or the time it takes to increase output. For example, if a product requires specialized labor or rare materials, it will be difficult for producers to quickly ramp up production even if demand and prices rise.1
The supply and demand model explains that the equilibrium price is determined by the interaction of how much producers want to sell and how much consumers want to buy. When supply has low elasticity, price changes can have a more pronounced effect on market balance because supply cannot easily adjust to meet shifts in demand.1
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