2.6 Elasticity of Supply

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IB Economics (SL)

Microeconomics

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4 Terms

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Price elasticity of supply

Measures the responsiveness of quantity supplied in a market as a result of change in price.

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Inelastic supply

When a change in price leads to a proportionately lesser change in quantity supplied.

- 0 < PES < 1

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Elastic supply

when a change to a proportionally greater change in quantity supplied.

- 1< PES < ♾️

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Determinants of PES

TRICS

(Time, Rate at which costs increase, Inventory, Capacity, Substitute Factors. of Production)