Definition
- Stocks
- Stocks are finished goods held in a warehouse, which a firm can release onto the market at once when the price rises, before producing anything extra.
Example
Can you think of an example of stocks?
A toy firm with a warehouse full of last year's best seller can put far more on sale in the week its price jumps, so its supply is elastic.
Test yourself
Can you name the four determinants of price elasticity of supply?