USITC Staff Report: Quartz Surfaces from India and Turkey staff report USITC | Page 46

U.S. supply elasticity
The domestic supply elasticity for quartz surface products measures the sensitivity of
the quantity supplied by U.S. producers to changes in the U.S. market price of quartz surface
products. The elasticity of domestic supply depends on several factors including the level of
excess capacity, the ease with which producers can alter capacity, producers’ ability to shift to
production of other products, the existence of inventories, and the availability of alternate
markets for U.S.-produced quartz surface products. Analysis of these factors above indicates
that the U.S. industry has the ability to increase shipments to the U.S. market; an estimate in
the range of 4 to 6 is suggested.
U.S. demand elasticity
The U.S. demand elasticity for quartz surface products measures the sensitivity of the
overall quantity demanded to a change in the U.S. market price of quartz surface products. This
estimate depends on factors discussed above such as the existence, availability, and
commercial viability of substitute products, as well as the component share of the quartz
surface products in the production of any downstream products. Based on the available
information, the aggregate demand for quartz surface products is likely to be moderately
inelastic to moderately elastic; a range of -0.75 to -1.25 is suggested.
Substitution elasticity
The elasticity of substitution depends upon the extent of product differentiation
between the domestic and imported products. 17 Product differentiation, in turn, depends upon
such factors as quality (e.g., chemistry, appearance, etc.) and conditions of sale (e.g.,
availability, sales terms/discounts/promotions, etc.). Based on available information, the
elasticity of substitution between U.S.-produced quartz surface products and imported quartz
surface products is likely to be in the range 3 to 5.
17
The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of
the subject imports and the domestic like products to changes in their relative prices. This reflects how
easily purchasers switch from the U.S. product to the subject products (or vice versa) when prices
change.
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