Price elasticity of supply

9th of March, 2008 Håvard

Elasticity of supply is the measure of responsiveness of the quantiy supplied to a change in the price. The price elasticity of supply is always positive because an increase in price is likely to cause an increase in the quantity supplied. The price elasticity of supply can be expressed as:

Price elasticity of supply = Percentage change in quantity supplied / Percentage change in price

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