What refers to supply that changes significantly with price changes?

Elastic supply refers to a situation where the quantity supplied changes significantly in response to alterations in price. When supply is elastic, a small increase in price can lead to a proportionately larger increase in the quantity supplied. This indicates that producers can respond swiftly to price changes, often because they have the capacity to adjust production levels easily, such as by increasing workforce hours, utilizing more raw materials, or leveraging additional production capacity.

In contrast, inelastic supply would mean that the quantity supplied changes very little despite significant price changes, and perfectly inelastic supply indicates that the quantity supplied remains constant regardless of price changes. Unit elastic supply represents a situation where the percentage change in quantity supplied is exactly equal to the percentage change in price, resulting in no overall change in revenue. Understanding these concepts helps in analyzing how producers respond to market conditions and price fluctuations.