Supply (HSC SSCE Economics): Flashcards

Responsiveness of quantity supplied to price changes

$\frac{\% \text{ change in Qs}}{\% \text{ change in P}}$

$PES > 1$ (Qs changes more than price)

$PES < 1$ (Qs changes less than price)

$PES = 1$ (Qs and price change by same %)

Horizontal - infinite quantity supplied at one price

Vertical - fixed quantity regardless of price

Time - longer time periods make supply more elastic

Easier storage makes supply more elastic

More spare capacity makes supply more elastic