theme 1.2.5 (price elasticity of supply)

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Last updated 6:45 PM on 8/21/26
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9 Terms

1
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What is PES

it’s How much the quantity supplied changes when the price changes.

2
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Formula for PES

PES = % change in quantity supplied : change in price

3
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What does it mean is PES is elastic

Quantity supplied changes more than proportionately compared with the changes in price

4
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What does it mean if PES is inelastic?

Quantity supplied changes less than proportionately compared with the change in price.

5
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If price changes by 10% and quantity supplied changes by 30%, is supply elastic or inelastic?

Elastic because quantity supplied changed more than price

6
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If price changes by 30% and quantity supplied changes by 10%, is supply elastic or inelastic?

Inelastic because quantity supplied changed less than price

7
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What is the main factor affecting PES

time

8
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Why is PES more elastic in the long run

Firms have more time to increase productivity

9
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Why is PES more inelastic in the short run

Firms may have limited capacity and resources