DATE NAME Guided Reading Activity cont. Supply - paid to a business by the government usually has the effect of lowering cost and A Increasing for consumers, increase product 5. Although some government they may also cause an Increase in prices, C. Elasticity of Supply Main Idea: Supply elasticity refers to how much the quantity supplied of a product responds to changes in the price of that product. 1. Supply Hasticity is a. of how much the quantity of a product supplied reacts to a change in. 2. In a product with supply, a change in price leads to a proportionally larger change in quantity supplied 3. For - supply, a change in price leads to a proportionally smaller change in quantity supplied. 4. With elastic supply. price changes and changes in supply are 5. Supply Is If a company can react to new prices 6. If the resources needed to make a product are very limited or It is difficult to. production quickly, then the supply is generally