Economics
Intermediate

Price Elasticity of Supply

How responsive quantity supplied is to a change in price.

Formula

Es=%ΔQs%ΔPE_s = \dfrac{\%\Delta Q_s}{\%\Delta P}

Variables

E_sElasticity of supply
\%\Delta Q_s% change in quantity supplied
\%\Delta P% change in price

Example

Supply +15% when price +10%: E_s = 1.5

Did You Know?

Supply is more elastic over the long run, when firms have time to build capacity and enter markets.

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