2.8

Question 1

define price elasticity of supply

Answer 1

Price elasticity of supply
(PES) measures the degree
of responsiveness of the
quantity supplied of a
product following a change
in its price

Question 2

how can we calculate the price elasticity of supply

Answer 2

percentage change in quantity supplied/ percentage change in price

Question 3

define price elastic supply

Answer 3

the percentage change in quantity supplied is greater than the percentage change in price

Question 4

define price inelastic supply

Answer 4

the percentage change in quantity supplied is lower than the percentage change in price

Question 5

define short run

Answer 5

the amount of time that is less than what is required for a firm to be able to expand and increase all of the factors of production. it is when at least one of the factors of production cannot be changed.

Question 6

define unit elastic supply

Answer 6

the percentage change in quantity supplied is equal to the percentage change in price

Question 7

what affects the price elasticity of supply

Answer 7

time period, the amount of stock, level of pare capacity, mobility and costs of factors of production

Question 8

define long run

Answer 8

the time it takes to change the factors of production to expand and produce on a larger scale

Question 9

define mobility of factors of production

Answer 9

how easily any of the factors of production can be transferred to an alternative use