Price Elasticity of Supply (AQA A-Level Economics): Flashcards
📚Flashcards
Practise the cards
10 cards from this deck
ShowHide
Practise the cards
10 cards from this deck
Definition of PES
Definition of PES
Responsiveness of quantity supplied to price changes
PES formula
PES formula
% change in qty supplied ÷ % change in price
Sign of PES
Sign of PES
Positive (higher prices → more supply)
Elastic supply PES value
Elastic supply PES value
PES > 1
Inelastic supply PES value
Inelastic supply PES value
PES < 1
Perfectly inelastic supply PES & curve
Perfectly inelastic supply PES & curve
PES = 0, vertical curve
Supply curve through origin elasticity
Supply curve through origin elasticity
Unit elastic (PES = 1 at all points)
Time period with most elastic supply
Time period with most elastic supply
Long run (all factors can adjust)
Effect of spare capacity on PES
Effect of spare capacity on PES
More spare capacity makes supply more elastic
UK housing market PES
UK housing market PES
+0.4 (inelastic)