PES - calculation
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.