Price Elasticity of Supply Quiz

What does Price Elasticity of Supply (PES) measure?

• The relationship between supply and demand

• The total supply of goods in the market

• Responsiveness of quantity demanded to price changes

• Responsiveness of quantity supplied to price changes

If the price elasticity of supply (PES) is 0.5, how responsive is the supply to price changes?

• Inelastic and less responsive

• Perfectly inelastic

• Highly responsive

• Unitary elastic

Which of the following factors does NOT influence the price elasticity of supply?

• The time period involved

• Spare capacity

• The availability of substitutes

• The mobility of the factors of production

What is not a key characteristic of a product with elastic supply?

• Producers can easily adjust production quantities

• Quantity supplied remains constant regardless of price changes

• The PES value is greater than 1

• suppliers are highly responsive to price changes

If the price of a product decreases by 10% and the PES is 2, what is the expected change in quantity supplied?

• It falls by 20%

• It increases by 20%

• It falls by 10%

• It increases by 10%

What happens to consumers when a product has a PES of 0.2 during a sudden surge in demand?

• Consumers will experience lower prices

• Consumers will face significantly higher prices

• Consumers will face minimal price changes

• Consumers will benefit from lower prices

What is the PES of a product if a 15% decrease in price results in a 10% increase in quantity supplied?

• 1.5

• 1.2

• 0.67

• 0.5

Which of the following would likely result in a more elastic supply?

• Limited production capacity

• High storage costs

• Easy availability of production inputs

• Unique and specialised products

The table shows the quantity that producers are willing to supply at different prices. If the price increases from $120 to $180, what is the PES?

• 0.16

• 6

• 0.2

• 4

The table shows the effect of a change in price from $5 to $6 on the supply of a product. Which statement about the PES is correct

• PES is 0.4

• PES is 2.5

• Supply is inelastic

• Supply is unitary elastic