What are supply-side rigidities?

Supply-side rigidities are when things inside a factory or business can’t change quickly, like when you’re stuck in traffic and can’t get to school on time.

Imagine you have a toy factory, and it makes cars. Every day, the factory uses robots and workers to build cars. But one day, the factory gets an order for 10 times more cars than usual. If the factory had flexible parts, like extra robots or workers who could help out, they’d just make more cars easily.

But if the factory has supply-side rigidities, that means it can’t change fast enough. Maybe all the robots are already working, and there's no room to add new ones. Or maybe the workers need time to learn how to build a different kind of car. That’s like being stuck in traffic, you want to go faster, but everything is slow.

So, supply-side rigidities make it hard for a business to grow or change when things get busy, just like trying to speed up a toy car that's stuck in a tight spot.