Question 6
[Maximum number: 1]
A theatre has a fixed number of tickets to sell for each performance.
What is the price elasticity of supply?
A
perfectly elastic
B
perfectly inelastic
C
unit elastic and negative
D
unit elastic and positive
CAIE A-Level Economics 2.3.3 PES Coefficient
Practise interpreting PES coefficients and supply-curve geometry, including unitary, perfectly elastic and perfectly inelastic supply at different points on a curve.
How this is tested
- classify PES above one as elastic, below one as inelastic and equal to one as unitary
- recognise vertical supply as perfectly inelastic and horizontal supply as perfectly elastic
- interpret how PES can vary along a straight supply curve after a price or tax change