and a small quantity increase d1 25 d0 0 5 10 13 15

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: r hour) 20 Price Elasticity of Supply Price (dollars per pizza) 40.00 30.00 21.00 20.00 10.00 An increase in demand brings ... Small price change and large quantity change Sb ... a small price rise... ... and a large quantity increase D1 D0 0 5 10 15 Quantity (pizzas per hour) 20 25 Price Elasticity of Supply elastic supply a % change in a product's price causes a greater % change in the quantity supplied inelastic supply a % change in a product's price causes a smaller % change in the quantity supplied Perfectly Inelastic Supply Price S1 Elasticity of supply = 0 Quantity supplied is the same for any price! 0 Quantity Unit Elastic Supply Price S1 Elasticity of supply = 1 S2 0 Quantity Perfectly Elastic Supply Price Elasticity of supply = S3 Suppliers will offer ANY quantity at this price 0 Quantity Factors That Affect Supply Elasticity Resource substitution Time frame Momentary- none of the required resources can be varied short run - at least one of the required resources can be varied long run - all of the required resources can be varied...
View Full Document

This document was uploaded on 03/14/2014.

Ask a homework question - tutors are online