PES depends on one question: how easily can producers make more? Five things decide it.
What makes supply elastic
More time
Over time firms can build, hire and train.
Spare capacity
Idle machines and staff can start work at once.
Goods that can be stored
Stocks can be sold as soon as the price rises.
Mobile factors of production
Workers and machines can switch over from other products.
Costs that rise quickly
Each extra unit costs much more to make, so firms add little.
Remember it as: Time, spare capacity, stocks, mobile factors: each makes supply more elastic.
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Time is the most important determinant. Watch the same price rise in three time periods.
Our example (made-up numbers)
| Time period | Price | Quantity supplied | PES |
|---|---|---|---|
| Right now (momentary) | €6 → €8 | 40 → 40 | 0 |
| Short run | €6 → €8 | 40 → 45 | 0.4 |
| Long run | €6 → €8 | 40 → 70 | 2.3 |
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See how examiners mark answers
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Two goods from the same farm show how storing changes PES.
Same fruit, different PES
| Fresh strawberries | Frozen strawberries | |
|---|---|---|
| Can they be stored? | A few days | Many months |
| When the price rises | Only what is ripe today can be sold | Stocks in the freezer go on sale |
| PES | Inelastic | More elastic |
The points to remember
- Stocks let a firm sell more at once, so supply is more elastic.
- Goods that spoil quickly have inelastic supply.
No Standard Level paper has set the determinants on their own yet; Higher Level Paper 1 asked about them in May 2025. This is the Paper 1 part (a) shape.
Explain how the time period and the amount of spare capacity in an industry affect the price elasticity of supply.
Model answer plan
See the answer broken into clear points, with guidance on how each point earns marks.
Animated graph
Watch the graph build step by step in study mode.
What the diagram must show
- Axes P and Q; a steep short-run S and a flatter long-run (or spare-capacity) S through P1, Q1.
- The same price rise P1 → P2: a small rise to Q2 on the steep curve, a big one to Q3 on the flat curve.
How the 10 marks are given
| Marks | What your answer needs |
|---|---|
| 9–10 | Both parts fully explained, terms used correctly all the way through, the diagram included and fully explained |
| 7–8 | Both parts explained, terms mostly right, the diagram included and explained |
| 5–6 | Partly explained, some terms, the diagram included |
| 6 at most | Only one of the two parts answered, however good it is |