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Economics

How would you calculate the price elasticity of supply?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 4WNG: The quantity supplied of a good rises from 120 to 140 as price rises from 4 to 5.50. What is the...

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How would you calculate the price elasticity of supply?

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Expert Solution

Step 1

Price elasticity of supply is change in quantity supplied of a commodity in respect to change in price. Symbolically it is calculated as:

$E_{s} = \frac{P e r c e n t a g e c h a n g e i n Q u a n t i t y S u p p l i e d}{P e r c e n t a g e C h a n g e i n P r i c e}$

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