PES of Primary Commodities vs Manufactured Goods

This topic explains why the price elasticity of supply (PES) for primary commodities is generally lower than for manufactured goods. It compares how factors such as time to produce, storability, marginal costs, production capacity and ease of substituting factors make supply of primary products less responsive to price changes than manufactured products. Understanding these differences helps predict how quantities supplied will change after price shocks in different sectors. This is required at HL to apply the TICCS determinants of PES to primary versus manufactured outputs.