6- Price elasticity of supply Flashcards
1
Q
PES equation
A
PES= % change in quantity supplied / % change in price
2
Q
Unitary elastic PES
A
PES=1
3
Q
Relatively price elastic PES
A
PES>1
4
Q
Relatively price inelastic PES
A
PES<1
5
Q
Perfectly price elastic PES
A
PES= infinity
6
Q
Perfectly price inelastic PES
A
PES=0
7
Q
Determinants of PES
A
Production lag Spare capacity Stocks Substitutability of factors of production Time
8
Q
PES in the short run
A
Inelastic
9
Q
PES in the long run
A
Elastic
