PES

Question 1

Price discrimination

Answer 1

Varying prices of same good based on customers willingness to pay.
Different groups of ppl have different PED.
Is done to maximize total revenue

Question 2

PES

Answer 2

Measures responsiveness of Quantity supplied to change in price.

Perfect inelastic supply is price change having no effect on Qs.
Perfect elastic supply is having infinite supply at given price.

Question 3

Elastic supply

Answer 3

A good which is easy to make & distribute in a short period of time.

When %change in Qs > %change in price

Question 4

Inelastic supply

Answer 4

A good which needs a long period of time to produce.

When %change in Qs < %change in price

Question 5

Determinants of PES

Answer 5

Time, nature of industry, ability to store inventories

Question 6

Time

Answer 6

When producers respond quickly to price change, supply is price elastic.

Question 7

Nature of industry

Answer 7

Goods which are easier to produce and distribute are price elastic.
Example: manufactured goods

Question 8

Availability to store inventories

Answer 8

Producers can store non-perishable goods to react quickly to change in demand to make supply elastic.
(Perishable goods are inelastic)