Types of P.E.S

• Perfectly inelastic supply

  • When change in price of a good does not lead to any change in the qty supplied of that good.
  • Value of P.E.S is 0.
  • This applies to agricultural goods such as maize and beans because they take long periods to produce and supply. It can also apply to minerals such as gold and diamond because they take a long time to discover.

  
• Inelastic supply

  • This is when a greater change in price of a good leads to a smaller change in the qty supplied of the good.
  • P.E.S = 0<P.E.S<1 ( greater than zero but less than 1)

  
• Unitary

  • This is when an equal change in price leads to an equal change in qty supplied.
  • P.E.S = 1

  
• Perfectly elastic

  • This is when a small change in price leads to an infinite(endless) change in qty supplied .
  • This means that producers are prepared to supply any amt at a given price.
  • P.E.S = Infinite

  
• Elastic supply

  • This is when a smaller change in price leads to greater change in qty supplied.
  • P.E.S is greater than 1 (>1)
  • This applies to manufactured goods which can be produced in large quantities within a short period.