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Relatively elastic supply

If a small change in price leads to a greater change in quantity supplied it is called as relatively elastic supply, in which elasticity is greater than one (e > 1). In the figure, when the price changes from P to P’, the quantity supplied also changes from Q to Q’. Here, a small change in the price leads to greater change in the supply curve.

 

Note: 2% change in price brings 5% change in quantity supplied.


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Relatively inelastic supply

If a large change in price leads to a smaller change in the quantity supplied it is called as relatively inelastic supply, in which elasticity is lesser than one (e<1). In the adjacent figure, when the price increases from OP to OP’, quantity supplied increases from OQ to OQ’.

 

Note: 5% increase in price leads to only 2% increase in supply.


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Unitary elasticity

If any change in price brings about equal proportionate change in the quantity supplied, it is called as unitary elasticity, in which elasticity is always equal to one (e = 1). In the figure, when the price changes from P to P’, the quantity supplied also changes from Q to Q’. Here, change in the price leads to equal proportionate change in the quantity supplied.
 
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Perfectly inelastic

Any change in price if quantity supplied in unaffected, it is called as perfectly inelastic. In this elasticity is zero (e = 0). In the figure, when the price changes from P to P’, the quantity supplied does not change. Here, the quantity supplied is not dependent on the change in the price. Whether the price rises or shrinks, the quantity supplied will not change.
 
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Perfectly elastic supply

The supply elasticity is infinite when nothing is supplied at a lower price but a small increase in price causes supply to rise from zero to an indefinitely large amount indicating that producers will supply any quantity demanded at that price. In this case elasticity will be infinite (e = ).
 
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