What characterizes elastic supply?

Elastic supply is characterized by a high responsiveness of quantity supplied to price changes. This means that when the price of a good or service increases, producers are willing and able to increase the quantity they supply significantly. This responsiveness occurs because producers can adjust their production levels easily in reaction to price fluctuations, often because they have access to the necessary resources and technology or because they can increase production without significant costs.

In a market scenario where supply is elastic, a slight increase in price leads to a much larger increase in the quantity supplied, thereby demonstrating the sensitivity of producers to market price changes. This concept is essential in understanding how markets operate, particularly in competitive environments where suppliers must respond to the pricing strategies of their competitors.