Price Elasticity of Supply

PES =

• % change in quantity supplied of the product / % change in price of the product

• % change in price of the product / % change in quantity supplied of the product

• % change in quantity supplied of the product * % change in price of the product

• % change in quantity supplied of the product - % change in price of the product

for PES = 0

• supply is inelastic

• supply is unit elastic

• supply is perfectly inelastic

• supply is perfectly inelastic

draw the diagram for PES = infinity

for PES = 1

• PES is perfectly elastic

• PES is unit elastic

• PES is perfectly inelastic

• PES is elastic

draw diagram for PES = 0

What are the determinants of price elasticity of supply?

• rise of costs, storage, time

• capacity, time, ease of storage

• time, labour demand

• storage, quantity demanded, time

Does unused capacity allow an increase in supply without increasing costs?

• Yes!

• No.

Which type of good has on general more elastic supply?

• primary commodities

• manufactured goods

• merit goods

• demerit goods

In the short term supply is usually elastic

• true

• false

• not specified

• question is not specific enough

Draw one [1] primary commodity