LS12 - Price Elasticity Of Supply Flashcards
1
Q
Price Elasticity Of Supply
A
Measures the responsiveness of supply given a change in price.
2
Q
Price Elastic
A
When a price change causes a larger change in supply
3
Q
Price Inelastic
A
When a price change causes a smaller change in supply.
4
Q
Determinants Of PES
A
P - Production Lag S - Stocks S - Spare Capacity S - Substitutability Of FOPs T - Time
5
Q
Price Elasticity Of Supply Equation
A
Percentage Change In Quantity Supplied/Percentage Change In Price
6
Q
1
A
Elastic
7
Q
0
A
Inelastic
