Price elasticity of supply
Definition. Price elasticity of supply measures the responsiveness of quantity supplied to a change in the price of a good. It is calculated as the percentage change in quantity supplied divided by the percentage change in price, and is normally positive because supply slopes upward.
Supply tends to be more elastic in the long run, when firms can adjust all factors of production, and is influenced by spare capacity, the ease of storing stock, and the time available to respond.
This term belongs to Price Elasticity of Demand and Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
Want to use price elasticity of supply for marks in the exam? Learn it in class or message the team.