1.2.5: Elasticity of supply

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Created by
Kendrick Lamar

Cards (8)

  • Inelastic supply: Percentage change in quantity supplied is less than percentage change in price
  • Elastic supply: Percentage change in quantity supplied is more than percentage change in price
  • Unitary supply: Percentage change in quantity supplied is the same as percentage change in price
  • Perfectly elastic supply: PES = Infinity
  • Perfectly inelastic supply: PES = 0
  • Factors Influencing PES (BEASTS)
    Breakdowns in supply
    Ease of entry into a market
    Availability of substitutes
    Spare capacity
    Time
    Stock
  • Price elasticity of supply: The responsiveness of quantity supplied of a good to a change in price
  • Formula for PES: Percentage change in quantity supplied / percentage change in price