Answer to Question #272820 in Microeconomics for nora

Question

what is the formula for measuring the price elasticityof supply? suppose the rice of apples

Answer 1

Formula for price elasticity of supply:

Price Elasticity of supply= percentage change in quantity supplied/percentage change in price.

$=\frac{Percentage Change in Quantity supplied}{Percentage Change in Price}$

$PES=\frac{\frac{1200-1000}{1100}\times100}{\frac{22-20}{21}\times100}$

$PES=1.91=2.$

Since price elasticity of supply is greater than 1, the supply is elastic.