What term refers to the sensitivity of supply to price changes?

The term that describes the sensitivity of supply to price changes is known as Price Elasticity of Supply. This concept measures how much the quantity supplied of a good or service responds to a change in its price. If the price of a product increases, suppliers are usually willing to produce more of it, reflecting a positive relationship between price and quantity supplied.

A higher elasticity indicates that suppliers can adjust their output more significantly in response to price changes, while lower elasticity implies that suppliers are less responsive. For example, if the price of a commodity rises significantly and suppliers can easily ramp up production, that indicates a high price elasticity of supply.

Using this understanding, it becomes clear why the other options do not apply. Price Elasticity of Demand focuses on how quantity demanded changes in response to price, rather than supply. Demand Elasticity is another term for demand responsiveness, not supply. Supply Shift refers to changes in the supply curve itself, which can happen for various reasons, including non-price factors, but does not measure the sensitivity to price changes. Thus, Price Elasticity of Supply is the accurate term that directly pertains to the relationship between supply and price fluctuations.