PES

Question 1

What does PES stand for ?

Answer 1

Price elasticity of supply

Question 2

What does PES do?

Answer 2

Measures the responsiveness of quantity supplied given a change in price

Question 3

How do u calculate PES

Answer 3

%change in quantity supplied / %change in price

Question 4

How do you calculate % change

Answer 4

Difference / original X 100

Question 5

If PES is greater than 1 supply is ?

Answer 5

Price elastic

Question 6

If PES is smaller than 1 supply is?

Answer 6

Price inelastic

Question 7

If PES = 0 supply is ?

Answer 7

Perfectly price inelastic

Question 8

If PES = ♾️ supply is ?

Answer 8

Perfectly price elastic

Question 9

What does price elastic mean? (supply)

Answer 9

For any given price change there is a greater proportion of quantity supplied
(Quantity supplied changed by more than price change)

Question 10

What does price inelastic mean? (Supply)

Answer 10

For any given price change there is a smaller proportion of quantity supplied
(Quantity supplied changed by less than price change)

Question 11

What does perfectly price inelastic mean? (supply)

Answer 11

Regardless of change in price quantity supplied will never change

Question 12

What does perfectly price elastic mean? (supply)

Answer 12

A change in price will cause quantity demanded to cease

Question 13

Price of barrel of oil ⬆️£40 to £60
Qs ⬆️ 150 to 180 barrels calculate PES

Answer 13

PES = %change Qs / %change in price
= 20%/50%
=0.4 (price inelastic)