+3 votes
in Class 12 by kratos

What does the price elasticity of supply mean? How do we measure it?

1 Answer

+3 votes
by kratos
 
Best answer

Price elasticity of supply(es) is defined as the degree of the responsiveness of quantity supplied, to the change in the price of a good.

It is expressed as:

es = (Percentege change in quantity supplied)/(percentage change in price)

where,

ΔQ = change in quantity supplied
ΔP = change in price

P = initial price
Q = initial supply

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