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What Does the Price Elasticity of Supply Mean? How Do We Measure It? - Economics

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Short Note
Sum

What does the price elasticity of supply mean? How do we measure it?

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Solution

Price elasticity of supply (es) is defined as the degree of the responsiveness of quantity supplied, to the change in the price of a good.

It is expressed as:-

`e_s="Percentage change in quality supplied"/"Percentage change in price"`

`=((DeltaQ)/Qxx100)/((DeltaP)/Pxx100)`

`=(DeltaQ)/QxxP/(DeltaP)`

`=(DeltaQ)/(DeltaP)xxP/Q`

Where

ΔQ = change in quantity supplied

ΔP = change in price

P = initial price

Q = initial supply

Concept: Price Elasticity of Supply
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APPEARS IN

NCERT Class 11 Economics Introductory Microeconomics
Chapter 4 The Theory Of The Firm Under Perfect Competition
Exercise | Q 18 | Page 68
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