Price elasticity of supply - PES

What is the PES equation

% Change in quantity supplied / % change in price

What is the effect of stocks on PES

Larger the stocks the larges - the more price elastic supply will be

What is the effect of production lag on PES

Longer the production lag - the more price inelastic PES is

Is PES positive or negative?

PES is always positive

What determines whether PES is elastic or inelastic

PSSST production Lag Stocks Spare Capacity Substitutability of FOPs Time

What is PES in the long-run

Price elastic

What is PES in the short-run

Price inelastic

What is the slope if PES is ♾

Slope is perfectly horizontal

What is the slope if PES is 1

Slope is perfectly vertical

What if PES is ♾

Supply is perfectly price elastic

What if PES is 0

Supply is perfectly price inelastic

What if PES is >1

Supply is price elastic

What if PES is <1

Supply is price inelastic

What if PES is 1

Supply is unit price elastic

What is the effect on spare capacity on PES

The more spare capacity - the more price elastic supply will be

What is the effect of substitutability of FOP on PES

The more substitutable FOPs are - the more price elastic supply is

What is the slope for PES

Upward sloping (Positive relationship)

What is PES

measures the responsiveness of quantity supplied to a change in price