Price elasticity of supply, Managerial Economics

Price Elasticity of Supply

Price Elasticity of supply measures the degree of responsiveness of quantity supplied to changes in  price.  The co-efficient of the elasticity of supply may be stated as:

Es   =   Percentage change in the quantity supplied

             Percentage change in price.

Mathematically, this can be written as:  1043_price elasticity of supply.png

Symbolically it is given by the formula  Es  =  2184_price elasticity of supply1.png

Because of the positive relationship between price and quantity supplied, the price elasticity of supply ranges from zero to infinity.

Posted Date: 11/27/2012 6:44:32 AM | Location : United States

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