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### lectur19

Course: ARE 012, Fall 2008
School: N.C. State
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Elasticity Elasticity Supply of Supply, Is the percentage change in quantity supplied associated with a percentage change in price. Es = % Qs / % P Es = QS P X P0 Q0 Interpreting Elasticity of Supply If Es &gt; 1 elastic supply Es &lt; 1 inelastic supply Es = 1 unitary elastic supply If the Supply curve is a straight line: P Es &gt; 1 S If the supply curve cuts the price axis (Y), then...

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Elasticity Elasticity Supply of Supply, Is the percentage change in quantity supplied associated with a percentage change in price. Es = % Qs / % P Es = QS P X P0 Q0 Interpreting Elasticity of Supply If Es > 1 elastic supply Es < 1 inelastic supply Es = 1 unitary elastic supply If the Supply curve is a straight line: P Es > 1 S If the supply curve cuts the price axis (Y), then supply is ELASTIC Qs/ut If the Supply curve is a straight line: S P Es < 1 If the supply curve cuts the quantity axis (X), then supply is INELASTIC Qs/ut If the Supply curve is a straight line: S P Es = 1 If the supply curve comes out of origin, the then supply is UNITARY ELASTIC Qs/ut Sections of Elasticity Es > 1 P S Less Elastic More Elastic Qs/ut Sections of Elasticity Es < 1 P S Less Inelastic More Inelastic Qs/ut Time and Elasiticy of Supply The longer the time period for adjustment, the more price elastic is the supply curve. The longer the time allowed for adjustment to a Price, the more firms...

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