## PES - calculation

Syllabus: Calculate the PES

Follow the links below to see some sample calculations if you are not sure about how to calculate the value of price elasticity of supply.

#### Example 1 - price elasticity of supply

#### Example 2 - price elasticity of supply

Price elasticity of supply measures the ability of a firm to increase or decrease its output in response to a change in price. This sensitivity changes with time, or rather with economic time and the degree of substitutability between factors of production.

#### Unitary elasticity of supply

Any straight-line supply function that passes through the origin has a coefficient of 1. Look at Figure 1. All the supply functions have an elasticity of 1.

So do not just assume the PES from the gradient of the supply curve.