A company experiences a significant increase in the price of its product, leading to a substantial increase in the quantity supplied. How would you classify the price elasticity of supply for this product?

When the price of a product goes up significantly and the company responds by supplying a lot more of that product, we can say that the price elasticity of supply is high. This means that suppliers are very responsive to price changes; when prices increase, they are willing to produce and sell much more. For example, if a company that makes bicycles raises its prices, it might quickly ramp up production to meet the higher demand, showing that they can easily adjust their supply. In this case, the relationship between price and quantity supplied is strong, indicating that the supply is elastic. Therefore, we classify the price elasticity of supply as elastic because the quantity supplied changes a lot with a change in price.