TSR Wiki > Study Help > Subjects and Revision > Revision Notes > Economics > Elasticity of Supply
Price elasticity of supply (PES) is measurement of the responsiveness of supply of a good to a change in price.
PES will always be positive because when the price of a good increases, more will be supplied (this is why the supply curve slopes upwards).
- Goods with an inelastic supply will see a less than proportionate increase in supply when the price increases.
- Goods with an elastic supply will see a more than proportionate increase in supply when the price increases.
Many goods, especially agricultural goods, have an inelastic supply in the short run because producers are unable to increase supply significantly with short notice.
- A PES greater than 1 is elastic
- A PES less than 1 is inelastic
Showing PES graphically
The idea of representing PES graphically is similar to that of representing PED:
- The supply curve for goods with an inelastic supply has a steep gradient. Perfectly inelastic PES goods have vertical supply curves (looks like a capital I).
- The supply curve for goods with an elastic supply has a gentle gradient. Perfectly elastic PES goods have horizontal supply curves (looks a bit like a capital E).
Factors affecting PES
- Spare capacity
- Time period of production
- Quantity of stocks
- Technology
Also See
Take a look at the other unit 1 A level economics revision notes:
- The Economic Problem (AQA, Edex, OCR, WJEC)
- Factors of production (AQA, OCR)
- Positive and normative economics (AQA)
- Specialisation and Trade (AQA, Edex, OCR, WJEC)
- Producer and consumer surplus (AQA, Edex, OCR, WJEC)
- Demand theory (AQA, Edex, OCR, WJEC)
- Supply theory (AQA, Edex, OCR, WJEC)
- Supply and Demand Equilibrium (AQA, Edex, OCR, WJEC)
- Elasticity of demand (AQA, Edex, OCR, WJEC)
- Elasticity of supply (AQA, Edex, OCR, WJEC)
- The Price Mechanism (AQA, Edex)
- Indirect Taxes and Subsidies (Edex)
- The labour market (Edex)
- Economies of scale (AQA)
- Allocative efficiency (OCR)
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