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Elasticity of Supply: Degrees, Factors (ICSE Class 10)

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EconomicsICSE Class 10 · Elasticity of Demand and Supply

Elasticity of Supply: Meaning, Percentage Method, Degrees and Factors (ICSE Class 10)

Updated 17 October 2026 · Fact-checked

Price elasticity of supply is the degree of responsiveness of the quantity supplied of a commodity to a change in its price. By the percentage method, Es = percentage change in quantity supplied ÷ percentage change in price. Supply is elastic if Es > 1, inelastic if Es < 1, unitary if Es = 1, perfectly elastic if Es is infinite (horizontal curve) and perfectly inelastic if Es = 0 (vertical curve).

Notice where each line starts: on the price axis means elastic, at the origin means unitary, on the quantity axis means inelastic; horizontal and vertical are t

Illustration drawn for QuestionBuddy.

Understand Elasticity of Supply: Degrees and Factors

Meaning. Elasticity of supply shows how strongly sellers change their output when the price changes. Because price and quantity supplied move in the same direction, Es is positive.

Percentage method. Es = (% change in quantity supplied) ÷ (% change in price). Numerical problems on elasticity are not for testing in the syllabus; the method should be understood.

Degrees.
1. Perfectly elastic supply (Es = ∞): any quantity is supplied at the given price; horizontal curve.
2. Perfectly inelastic supply (Es = 0): quantity fixed whatever the price, as with a rare painting; vertical curve.
3. Elastic supply (Es > 1): quantity changes by a greater percentage than price.
4. Inelastic supply (Es < 1): quantity changes by a smaller percentage.
5. Unitary elastic supply (Es = 1): equal percentage changes.

Factors affecting elasticity of supply.
1. Nature of the commodity: perishable goods such as vegetables, fish and milk have inelastic supply; durable goods have more elastic supply.
2. Time period: in the very short run supply is nearly fixed; in the long run, firms can expand capacity.
3. Cost of production: if costs rise sharply with extra output, supply is inelastic.
4. Availability of inputs: ample raw materials and labour make supply elastic.
5. Technology: modern, flexible techniques make supply elastic.
6. Stocks: goods that can be stored allow supply to respond quickly.
7. Producers' willingness and ability to take risk and invest.

Compare with demand. Demand elasticity depends on consumers' wants and substitutes; supply elasticity depends on producers' ability to change output, particularly time and cost.

Elasticity of Supply: Degrees and Factors: key facts

Es (percentage method)
Es = % change in quantity supplied ÷ % change in price
Degrees
  • Es = ∞ perfectly elastic
  • Es > 1 elastic
  • Es = 1 unitary
  • Es < 1 inelastic
  • Es = 0 perfectly inelastic
Curves
Perfectly elastic: horizontal | Perfectly inelastic: vertical
Main factors
  • Nature of good
  • Time
  • Cost
  • Inputs
  • Technology
  • Storage

How to answer Elasticity of Supply: Degrees and Factors questions

The steps are the same as for demand: two percentages, divide, compare with 1.

  1. 1Percentage change in quantity supplied = change ÷ original × 100.
  2. 2Percentage change in price = change ÷ original × 100.
  3. 3Es = quantity % ÷ price %.
  4. 4Name the degree by comparing with 1.
  5. 5State the factor that explains it (perishability, time, etc.).

Elasticity of Supply: Degrees and Factors in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Fresh fish and shoes

Suppose the price of fresh fish at a market rises from ₹200 to ₹240 a kg, but the quantity brought to the market on that morning rises only from 100 kg to 102 kg. The price of a pair of shoes rises from ₹500 to ₹600, and the factory raises output from 1,000 to 1,400 pairs over a few months.

Find Es in each case and say why they differ.

Try it first, then show the solutionSolution
  1. Fish: price change = 40 ÷ 200 × 100 = 20%; quantity change = 2 ÷ 100 × 100 = 2%; Es = 0.1 (inelastic).
  2. Shoes: price change = 100 ÷ 500 × 100 = 20%; quantity change = 400 ÷ 1,000 × 100 = 40%; Es = 2 (elastic).
  3. Fish is perishable and the catch is already fixed; shoes are durable and output can expand with time.

Answer: Es (fish) = 0.1, inelastic; Es (shoes) = 2, elastic.

Memory hook: Perishable: stuck; durable plus time: stretches.

Tricks to remember Elasticity of Supply: Degrees and Factors

Short memory aids. Say each one aloud once, then use it on a question the same day.

  • Fresh = fixed

    Perishable goods mean inelastic supply.

    Use it when: Factor.

  • Time loosens supply

    The longer the time, the more elastic the supply.

    Use it when: Factor.

  • Same shapes as demand

    Horizontal ∞, vertical 0.

    Use it when: Curves.

Elasticity of Supply: Degrees and Factors: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Vertical supply · 1 mark · MCQBoard level

A vertical supply curve shows:
(a) Es = ∞
(b) Es = 1
(c) Es = 0
(d) Es > 1

Try it first, then show the solutionSolution
  1. Quantity does not respond to price, so Es = 0.

Answer: (c)

Example 2: Compute Es · 2 marks · Short answerBoard level

When the price of a good rises from ₹10 to ₹12, quantity supplied rises from 50 to 65 units. Find Es. (2 marks)

Try it first, then show the solutionSolution
  1. % change in price = 2 ÷ 10 × 100 = 20%.
  2. % change in quantity = 15 ÷ 50 × 100 = 30%.
  3. Es = 30 ÷ 20 = 1.5, elastic. Check: 1.5 × 20 = 30.

Answer: Es = 1.5, elastic supply.

Example 3: Inelastic case · 3 marks · Short answerHarder board level

Price rises from ₹40 to ₹50 and quantity supplied rises from 200 to 210 units. Find Es. (3 marks)

Try it first, then show the solutionSolution
  1. Price change = 10 ÷ 40 × 100 = 25%.
  2. Quantity change = 10 ÷ 200 × 100 = 5%.
  3. Es = 5 ÷ 25 = 0.2, inelastic.

Answer: Es = 0.2, inelastic supply.

Example 4: Factors · 4 marks · Long answerHarder board level

Explain any four factors affecting elasticity of supply. (4 marks)

Try it first, then show the solutionSolution
  1. Nature: perishable goods have inelastic supply; durable goods have elastic supply.
  2. Time: in the short run supply cannot be expanded much; in the long run, it can.
  3. Cost: if costs rise steeply with output, supply is inelastic.
  4. Technology and inputs: flexible methods and ample inputs make supply elastic.

Answer: Nature, time, cost and technology/inputs.

Example 5: Compare periods · 3 marks · Short answerHOTS / competency

A bakery can raise bread output from 300 to 330 loaves within a day when the price rises 20%, but over a year (with a second oven) it raises output by 60% for the same price rise. Find Es in both periods and explain the difference. (3 marks)

Try it first, then show the solutionSolution
  1. Day: quantity change = 30 ÷ 300 × 100 = 10%; Es = 10 ÷ 20 = 0.5 (inelastic).
  2. Year: quantity change 60%; Es = 60 ÷ 20 = 3 (elastic).
  3. In the short period capacity is fixed; in the long period new capacity is added, so supply becomes more elastic.

Answer: Es = 0.5 in a day and 3 in a year; supply is more elastic with time.

Where students lose marks in Elasticity of Supply: Degrees and Factors

The slips examiners see most often, and what to write instead.

  • Mistake: Treating Es as negative

    Copied from demand law.

    Wrong working

    Es = −1.5.

    Right working

    Es = 1.5 as both changes are in the same direction.

    Do this: Es is positive.

    Usually costs: 1 mark.

  • Mistake: Reversing vertical and horizontal

    Confusion with demand.

    Wrong working

    Horizontal supply is perfectly inelastic.

    Right working

    Horizontal: perfectly elastic; vertical: perfectly inelastic.

    Do this: Same as demand.

    Usually costs: 1 mark.

  • Mistake: Ignoring time as a factor

    Common omission.

    Wrong working

    Only nature of the good.

    Right working

    Include time period.

    Do this: List time as the key factor.

    Usually costs: 1 mark.

Exam tips

  • Always explain the factor with an example.
  • Draw perfectly elastic and perfectly inelastic curves labelled.
  • Quantity percentage goes on top in Es.

Practice questions on Elasticity of Supply: Degrees and Factors

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

  1. Q1 · 1 mark · MCQBoard level

    A horizontal supply curve has:
    (a) Es = 0
    (b) Es = 1
    (c) Es = ∞
    (d) Es < 1

    Hint

    Any quantity at one price.

    Answer

    (c)

  2. Q2 · 2 marks · Short answerBoard level

    Define elasticity of supply. How is it measured? (2 marks)

    Hint

    Responsiveness.

    Answer

    It is the responsiveness of the quantity supplied to a change in price; measured as the percentage change in quantity supplied divided by the percentage change in price.

  3. Q3 · 3 marks · Short answerHarder board level

    When price rises by 10%, quantity supplied rises by 25%. Find Es and say whether supply is elastic or inelastic. Name one good where this is likely. (3 marks)

    Hint

    25 ÷ 10.

    Answer

    Es = 25 ÷ 10 = 2.5, elastic. Likely for manufactured durable goods such as shoes or cement bags in the long run.

  4. Q4 · 3 marks · Short answerHarder board level

    Why is the supply of perishable goods inelastic? (3 marks)

    Hint

    Cannot be held back.

    Answer

    Perishable goods such as vegetables cannot be stored, so sellers must sell soon and cannot hold back when price falls. In the short run output cannot be expanded when price rises either.

  5. Q5 · 3 marks · Short answerHOTS / competency

    At a price of ₹80 a firm supplies 400 units. The price falls to ₹72 and Es is 2. Find the new quantity supplied. (3 marks)

    Hint

    Price down 10%.

    Answer

    Price change = 8 ÷ 80 × 100 = 10% fall. Quantity change = 2 × 10 = 20% fall = 80 units. New quantity = 400 − 80 = 320 units.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

  1. 1.Es = ?Show answer

    % change in quantity supplied ÷ % change in price.

  2. 2.Vertical supply curve?Show answer

    Es = 0.

  3. 3.Perishable goods supply?Show answer

    Inelastic.

  4. 4.Longer time period makes supply?Show answer

    More elastic.

  5. 5.Sign of Es?Show answer

    Positive.

Elasticity of Supply: Degrees and Factors: frequently asked questions

What is elasticity of supply?

The responsiveness of quantity supplied to a change in price.

What are the factors of elasticity of supply?

Nature of the good, time, cost, inputs, technology and storage.

What is perfectly elastic supply?

Supply where any quantity is supplied at one price; the curve is horizontal.