Elasticity of supply

Perfectly inelastic

PES = 0

Quantity supplied does not change regardless of price.

%changeQ = 0 no matter %changeP

Relatively inelastic

0< PES < 1 Quantity supplied changes less than proportionally to price change. %changeQ < %changeР

Unitary elastic

• Quantity supplied changes exactly proportionally to price change

• PES=1

• %changeQ = %CHANGE

Relatively elastic

PES>1

Quantity supplied changes more than propotionllay to price change

%changeQ>%CHANGEP

Perfectly elastic

• Pes=infinito

• Producers will supply any amount at one price; above or below = 0 supply

• %changeQ is infinite if %changeP > 0

Perfectly inelastic

Short run agricultural supply, cannot increase output instantly (cocoa trees)

Relatively inelastic

Farmers need time, land, resources to responde to price changes

Unitary elastic

Manufacturing where output can be scaled smoothly