How does elasticity of supply differ for a product that can be stored, compared to a product that cannot be stored?
What will be an ideal response?
A product that can be stored can be withheld from the market for a time when the price falls and can be quickly supplied to the market from the inventory when the price rises. Hence the quantity supplied of the product can be quickly and markedly changed and so the supply is elastic. A product that cannot be stored, especially if it is perishable, cannot be withheld from the market when the price falls because it will spoil. In addition, when the price rises it cannot be supplied from the inventory because there is no inventory. Hence the quantity supplied of the product that cannot be stored cannot change much and is therefore less elastic.
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