Ch.12- Price elasticity of supply Flashcards
1
Q
Price elasticity of supply (PES)
A
A measure of the responsiveness of the quantity supplied to a change in price
2
Q
Elastic supply
A
When the quantity supplied changes by a greater percentage than the change in price
3
Q
Inelastic supply
A
When the quantity supplied changes by a smaller percentage than the change in price
4
Q
Perfectly inelastic supply
A
When a change in price has no effect on the quantity supplied
5
Q
Perfectly elastic supply
A
When a change in price causes a complete change in quantity supplied
6
Q
Unit PES
A
When a change in price causes an equal percentage change in the quantity supplied
