Elasticity of Supply - How Bike Shops Kept Up With America’s 121% Spike In Demand

This is simply terrific as a mini case study when teaching shifts in demand and factors influencing price elasticity of supply.

Elasticity of supply depends on many factors - for retailers it is largely about existing levels of inventory (stock) and warehouse space and whether they can tap into existing supply chains to bring more bikes (product) Into stock. Bike manufacturers depend on stocks of components and also being able to hire enough skilled workers. Supply chains seem to gave lengthened especially with the temporary closure of components factories in countries such as Taiwan.

One of the questions facing bike retailers and manufacturers is whether the surge in demand will hold during 2021? Has there been a step change in market demand as people choose to travel much less on public transport and more people opt to work from home?