price elasticity of supply
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12 Terms
What is the definition of price elasticity of supply
The responsiveness of supply to a change in price
What is the formula
Percentage change in quantity supplied/ percentage change in price
Perfectly inelastic supply is
A change in price leads to no change in supply
Perfectly elastic supply means
A change in price leads to an infinite change in supply
Price inelastic supply means
A change in price leads to a smaller change in supply between 0 and 1
Price elastic supply
A change in price leads to a proportionally larger change in supply - greater than 1
Unitary elasticity of supply
A change in price leads to a proportionate change in supply = 1
What are the factors affecting PES
Barrie’s to entry
Resources
Inventory
Time
Spare capacity
Note 
Flashcards (75)