Unlike the demand relationship, however, the supply relationship is a factor of time. Time is important to supply because suppliers must, but cannot always, react quickly to a change in demand or price. So it is important to try and determine whether a price change that is caused by demand will be temporary or permanent.
Let's say there's a sudden increase in the demand and price for umbrellas in an
unexpected rainy season; suppliers may simply accommodate demand by using their
production equipment more intensively. If, however, there is a climate change,
and the population will need umbrellas year-round, the change in demand and
price will be expected to be long term; suppliers will have to change their
equipment and production facilities in order to meet the long-term levels of demand.