3.4 Price Elasticity of Supply
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4 Terms
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How should numerical values of price elasticity supply of be interpreted?
A PES >1 is elastic supply
A PES <1 is inelastic supply
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How is price elasticity of supply calculated?
%Change in quantity supplied/
%Change in price
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What factors influence price elasticity of supply?
Factors include -
time period
availability of spare capacity
flexibility if production processes
avaiabiliy of raw materials
the ability to store stock
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Example of Elastic and Inelastic supply
Elastic: T-shirt
Inelastic supply: Pharmaceutical drugs
Note 
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