What characterizes a relatively elastic supply?

A relatively elastic supply is characterized by a large change in quantity supplied in response to a small change in price. This means that suppliers are very responsive to changes in price.

Here are the steps to understand this concept:

1. Elasticity: Elasticity in economics refers to the responsiveness of demand or supply to changes in price or income.

2. Supply Elasticity: Supply elasticity measures the responsiveness of the quantity supplied to a change in the price of a good.

3. Relatively Elastic Supply: If the supply is relatively elastic, the percentage change in quantity supplied is greater than the percentage change in price. This means that even a small change in price can lead to a large change in the quantity supplied.

4. Determinants: The elasticity of supply depends on various factors such as the availability of raw materials, the time period for the producer to respond to price changes, the mobility of factors of production, etc.

5. Graphical Representation: In a supply curve, relatively elastic supply is represented by a flatter curve, indicating that quantity supplied changes significantly with a small change in price.

6. Example: An example of a good with relatively elastic supply could be a product that is easy to produce and distribute, such as a digital product. If the price increases slightly, the supplier can quickly increase the quantity supplied because there are few barriers to production.