Definition Of Price Elasticity Of Supply (Pes)
Economics notes
Definition Of Price Elasticity Of Supply (Pes)
➡️ PES is a measure of how responsive the quantity supplied of a good or service is to a change in its price.
➡️ It is calculated by dividing the percentage change in quantity supplied by the percentage change in price.
➡️ PES can be either elastic, inelastic, or unitary.
➡️ If PES is elastic, a small change in price will cause a large change in quantity supplied.
➡️ If PES is inelastic, a large change in price will cause a small change in quantity supplied.
What is the definition of price elasticity of supply (PES)?
Price elasticity of supply (PES) is a measure of the responsiveness of the quantity supplied of a good or service to a change in its price. It is calculated by dividing the percentage change in quantity supplied by the percentage change in price.
What factors influence the price elasticity of supply?
Factors that influence the price elasticity of supply include the availability of substitutes, the cost of production, the time frame, and the number of suppliers.
How is the price elasticity of supply used in economics?
The price elasticity of supply is used in economics to determine how changes in price will affect the quantity supplied of a good or service. It is also used to determine the optimal price for a good or service, as well as to analyze the effects of taxes and subsidies on the market.