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Price elasticity of supply

Syllabus: Explain the concept of price elasticity of supply, understanding that it involves responsiveness of quantity supplied to a change in price along a given supply curve.

S:\TripleA\Design\icons\small\key_terms.gif Price elasticity of supply (PES)

A measure of the responsiveness of the quantity of a good supplied to changes in its own price.

Once again the number shows the elasticity (amount) but this time the sign is always positive (Law of Supply).

PES - formula

The value for price elasticity of supply is calculated and defined as:

(Supper on the Plate?)

PES is the % change in quantity supplied of a good or service divided by the % change in its price.