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Question
Price elasticity of supply of a good is 0.8. Is the supply 'elastic' or 'inelastic', and why?
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Solution
The supply is inelastic because the value of the coefficient of price elasticity of supply is less than one.
RELATED QUESTIONS
Draw a perfectly inelastic supply curve.
With the help of a suitable diagram, explain the following degree of elasticity of supply.
Es = ∞
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- Price elasticity of supply of a good is 0.8, its supply is said to be inelastic.
- If the quantity supplied of a commodity remain the same whatever its price supply is said to perfectly inelastic.
When the price increases by 50% and the supply increases only by 5% the price elasticity of supply of that commodity will be ______.
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Elasticity of supply is measured by:
Pick the option which does not belong to the group.
Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I:
| Column I | Column II |
| A. Perfectly Inelastic | (i) Es > 1 |
| B. Perfectly Elastic | (ii) Es < 1 |
| C. Inelastic | (iii) Es = 0 |
| D. Highly Elastic | (iv) Es = infinity |
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| Price | Quantity supplied |
| 10 | 200 |
| 15 | 225 |
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Indicate the degree of elasticity on the supply curve given below:
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