Calculating Price Elasticity of Supply

Definition

Calculating Price Elasticity of Supply involves measuring how responsive suppliers are to changes in price. It quantifies the percentage change in quantity supplied divided by the percentage change in price.

Related terms

Perfectly Elastic Supply: A situation where even the slightest change in price leads to an infinite change in quantity supplied.

Unitary Elastic Supply: A situation where the percentage change in quantity supplied is equal to the percentage change in price.

Cross Elasticity of Supply: Measures the responsiveness of suppliers to changes in the price of related goods.