2.6 Elasticity of supply

• PES equals percentage change in quantity supplied divided by percentage change in price

• PES has a theoretical range of values and indicates responsiveness of supply to price

• Calculation: PES, change in price, or quantity supplied from data

• PES depends on time, factor mobility, unused capacity, ability to store, and rate of cost increases

• Diagram: relatively elastic and relatively inelastic supply

• Diagram: perfectly elastic, perfectly inelastic, and unitary PES along a supply curve