Supply’s Sensitivity: Understanding Price Elasticity of Supply
Student Worksheet
Global health agencies forecast a surge in vaccine demand in early 2021, but with contract manufacturers already running full tilt, a price move from $5 to $15 a dose lifted output just 10% that quarter, an elasticity near 0.05. By mid-2022, after new production lines and added manufacturers, output had quadrupled and elasticity reached 1.2, the same product flipping from rigid to responsive once firms had time to build capacity.
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