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lectur19 - SupplyElasticity SupplyElasticity...

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Supply Elasticity Supply Elasticity
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Elasticity of Supply, Elasticity of Supply, Is the percentage change in quantity  supplied associated with a percentage  change in price. Es =  %    Qs  / %   P
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Es =   Q S     X     P 0              P               Q 0
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Interpreting Elasticity of Supply Interpreting Elasticity of Supply If  Es  >  1     elastic supply Es  <  1   inelastic supply Es  =  1   unitary elastic supply
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If the Supply curve is a straight line: P Qs/ut S If the supply curve cuts the price axis (Y), then supply is  ELASTIC Es > 1
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If the Supply curve is a straight line: P Qs/ut S If the supply curve cuts the quantity axis (X), then supply  is  INELASTIC Es < 1
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If the Supply curve is a straight line: P Qs/ut S If the supply curve comes out of the origin, then supply
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