Answer to Question #264821 in Microeconomics for Japollon

Question

The price elasticity of supply measures how?

Answer 1

It measures the responsiveness to the supply of commodities or services in the market when the price shift. Normally, the supply increases in response to rising prices and decreases when the prices of goods and services go down.

Price elasticity of supply is calculated as:

= Percentage change in supply/percentage change in price