Micro Foundations · intermediate
What moves on the Price Elasticity of Demand & Supply diagram
When production scales easily, supply is flat (elastic), demand shocks move quantity instead of price.
Start with ordinary supply.
Now the good is easily mass-produced, factories can scale output fast. Supply flattens.
Demand surges now raise QUANTITY, not price: producers absorb the shock.
Examiners ask this as: elastic supply, easy to scale, flat supply, manufacturing scale.
Other scenarios on Price Elasticity of Demand & Supply