Price elasticity of supply (P.E.S)

Precious Jasmin

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Factors affecting P.E.S
MICROECONOMICS > PRICE ELASTICITY > Elasticity of supply > Price elasticity of supply (P.E.S)
11 cards
Types of P.E.S
MICROECONOMICS > PRICE ELASTICITY > Elasticity of supply > Price elasticity of supply (P.E.S)
5 cards

Cards (19)

P.E.S
Rate at which qty supplied of a good changes due to a change in price of the good.
Formula
= NQ-OQ OP
------- X ------
OQ NP-OP
Price elasticity of supply is normally positive indicating a direct relationship between the change in price and change in qty supplied of the good. This is because at higher prices , larger quantities are supplied by producers.