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3 question and answers verified 2024
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3.4 Price elasticity of supply (PES)what is price elasticity of supply (PES)? - correct answer ✔a measure of the
responsiveness of the quantity of a good supplied to changes in its price
what is the formula of PES? - correct answer ✔percentage change in
quantity of good supplied/percentage change in price of good
what does PES<1 mean? - correct answer ✔PED<1: percentage change in
quantity supplied is smaller than the percentage change in price > quantity
supplied is relatively unresponsive to changes in price >
supply is price inelastic
supply curve extends upward and to the right from the horizontal axis
what does PES>1 mean? - correct answer ✔PED>1: percentage change in
quantity supplied is larger than the percentage change in price > quantity
supplied is relatively responsive to price changes > supply is price elastic
supply curve extends upwards and to the right from the vertical axis (end point
cuts the vertical axis)
what does PES=1 mean? - correct answer ✔PES=1: percentage change in
quantity supplied is equal to the percentage change in price > supply is unit
elastic
supply curve passes through the origin
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