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Question
Distinguish between the following.
Percentage method of measuring the elasticity of supply and Geometric method of measuring the elasticity of supply.
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Solution
| Percentage Method | Geometric Method |
| Under percentage method, the elasticity of supply is derived as the ratio of percentage change in quantity supplied to a percentage change in the price of the commodity. | Under the geometric method, the elasticity of supply is determined at different points on the supply curve |
|
It involves mathematical calculation. Algebraically, `e_s = ("ΔQ"/Q)/("Δp"/P)` |
It does not involve any mathematical calculation. The elasticity is determined just by looking at the supply curve. |
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