Elasticity of Supply Flashcards
1
Q
Define Price elasticity of supply?
A
Price elasticity of supply is the responsiveness of the quantity supplied to a change in the price of the product
2
Q
What is the PES formula?
A
PES=%change in quantity supplied/%change in price
3
Q
When is PES elastic?
A
When PES > 1
4
Q
When is PES inelastic?
A
When PES < 1
5
Q
When is PES unitary?
A
When PES= 1
6
Q
What does a unitary PES mean?
A
The %change in quantity supplied = the % change in price
7
Q
When is PES perfectly inelastic?
A
When PES=0
8
Q
When is PES perfectly elastic?
A
When PES= Infinity
