Answer: Elastic - quantity demanded responds substantially to changes in priceInelastic - quantity demanded responds only slightly to changes in price
How does the market react to a good being elastic/inelastic?

The price elasticity of supply (PES or Es) is a measure used in economics to show the responsiveness or elasticity of the quantity supplied of a good or service to a change in its price. The elasticity is represented in numerical form and is defined as the percentage change in the quantity supplied divided by the percentage change in price. When the elasticity is less than one the supply of the goo…

The price elasticity of supply (PES or Es) is a measure used in economics to show the responsiveness or elasticity of the quantity supplied of a good or service to a change in its price. The elasticity is represented in numerical form and is defined as the percentage change in the quantity supplied divided by the percentage change in price. When the elasticity is less than one the supply of the good can be described as inelastic; when it is greater than one the supply can be described as elastic. An elasticity of zero indicates that quantity supplied does not respond to a price change: the good is "fixed" in supply. Such goods often have no labor component or are not produced limiting the short run prospects of expansion. If the elasticity is exactly one the good is said to be unit-elastic. The quantity of goods supplied can in the short term be different from the amount produced as manufacturers will have stocks which they can build up or run down.

Availability of raw materials For example availability may cap the amount of gold that can be produced in a country regardless of price. Likewise the price of Van Gogh paintings is unlikely to affect their supply. Length and complexity of production Much depends on the complexity of the production process. Textile production is relatively simple. The labour is largely unskilled and production facilities are little …

Availability of raw materials For example availability may cap the amount of gold that can be produced in a country regardless of price. Likewise the price of Van Gogh paintings is unlikely to affect their supply. Length and complexity of production Much depends on the complexity of the production process. Textile production is relatively simple. The labour is largely unskilled and production facilities are little more than buildings – no special structures are needed. Thus the PES for textiles is elastic. On the other hand the PES for specific types of motor vehicles is relatively inelastic. Auto manufacture is a multi-stage process that requires specialized equipment skilled labour a large suppliers network and large R&D costs. Mobility of factors If the factors of production are easily available and if a producer produci...

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