If the price of a good increases by 10% and the quantity supplied increases by 5%, how would you classify the price elasticity of supply?

Price elasticity of supply measures how much the quantity supplied of a good changes when its price changes. In this case, the price of the good went up by 10%, but the quantity supplied only increased by 5%. To find the elasticity, we compare the percentage change in quantity supplied to the percentage change in price. Since the increase in quantity supplied (5%) is less than the increase in price (10%), we say that the price elasticity of supply is less than 1. This means the supply is inelastic, indicating that suppliers are not very responsive to changes in price, similar to how a small increase in the price of bread might not lead bakers to produce much more bread.