[MUSIC] We've looked at elasticities on the demand side, and I'd like to spend just a couple of minutes looking at elasticity on the supply side, or elasticity of supply, which measures the responsiveness of the supply curve. We know that supply curves are upward sloping, that a change in price or an increase in price will increase the quantity supplied. But the question is by how much? And that is what the elasticity of the supply measures. So all supply curves are upward sloping, but they can be relatively mildly upward sloping, or they can be relatively steep. So in this example, s0 is a relatively elastic supply curve. A change in price changes the quantity supplied by a lot. And this is a relatively inelastic supply curve, you're supplying basically the same amount, no matter what the price is. Let's think here of two extremes. The completely inelastic supply curve and the completely elastic supply curve. A completely inelastic supply curve, or a curve with a supply elasticity of zero is going to be a vertical line. This is a firm that has a quantity to sell, maybe 50 pounds of mangoes and will sell that product no matter what. This is a good example maybe facing a seller who has a perishable good. If you're a fisherman, and you start selling fish you're going to sell them at the going market price, because otherwise your fish will go bad. Another extreme is the completely ollastic supply curve. And that is the horizontal supply curve, and in this case the elasticity supply is equal to infinity. This is a firm that says the following at a going price, let's say $5 per pound, I'm willing to sell all the quantity that I have. But if the price drops even by $0.01, I'm not interested in selling. And this must be an example where the seller has another output where they can sell their good. So another market, and they say to themselves, well, if I'm not going to sell it to this consumer I can go ahead, and I can sell it somewhere else. And that's why they're not willing to sacrifice a lower price. So again, elasticity of supply looks at the responsiveness of the quantity supplied to the price. So it's the percentage change in quantity supplied over the percentage change in price. We're looking at how steep the supply curve is, the steeper it is, the closer is, the elasticity of supply to zero, the less steep it is, the closer it is to infinity. So elasticity of supply is going to be between 0 and infinity. The closer it is to 0, the less elastic is the supply. The closer it is to infinity, the more elastic is the supply curve.