Tag: supply - law of supply and price elasticity of supply

 Elasticity of supply measures the degree of responsiveness of quantity supplied to a change in own price of the commodity. It is also defined as the percentage change in quantity supplied divided by percentage change in price

1:The elasticity of supply is the responsiveness of the quantity supplied and the change in price.
2:The elasticity of supply is measured as the ratio of proportionate change in the quantity supplied to the proportionate change in price.

Es$=\dfrac{\%\Delta Q}{\%\Delta P}$.
The elasticity of supply is measured by dividing the percentage change in quantity supplied of a good by the Percentage change in price

Elasticity of supply is zero means perfectly inelastic supply $(Es = 0)$ and shape of curve will be vertical.

If $\Delta Q=\Delta P$ the $Es=1$(one).
So if the quantity supplied exactly equal to the relative change in price than the elasticity of supply is 1

If $\%$ $\Delta$Q $<$ $\%$ $\Delta$P then there is less then one elastic supply i.e., $e < 1$.
Supply is price elastic when the percentage change in quantity supplied is greater than the percentage change in price, and supply is price inelastic when the percentage change in quantity supplied is less than the percentage change in price.

$Es = \dfrac {\triangle q}{\triangle p} \times \dfrac {p}{q}$
$\triangle q = (300 - 240) = 60$
$\triangle p = (40 - 30) = 10$
$= \dfrac {60}{10}\times \dfrac {30}{240}$
$= .75$.

$E _{s} = \dfrac {\triangle q}{\triangle p}\times \dfrac {p}{q}$
$= \dfrac {25}{5}\times \dfrac {10}{100} = 0.5$.