Price Elasticity of supply: Definition and Explanation:

Price elasticity of supply measures the degree of responsiveness of supply of a product due to a change in the price of that product.

“Price elasticity of supply measures how responsive producers are to a change in the price of good. It is defined as a measure of the responsiveness of quantity supplied to change in price”

Measurement and Formula:

It is measured by dividing the percentage change in quantity supplied by the percentage change in price. Thus the percentage Method formula is:

E^s =

It can also be written as:

Es =

Es =

Just like demand, supply can also be elastic or inelastic.

Elasticity of supply:

Elasticity of supply represents the extent of change in supply in response to a change in price. If the amount supplied is highly response to a change in price, the supply is said to be elastic.