what is price elasticity of supply (PES)?

 Is a measure of how much the supply of a product changes when there

is a change in the price of the product
PES= percentage change in quality supplied of the product/percentage
change in price of the product.

The range of values of PES:

 Usually goes from zero to infinity. If PES is equal to zero, then a change
in the price of the product will have no effect on the quantity supplied
at all:

 The supply curve goes on forever so the quantity supplied is infinite:

 1. Inelastic supply: value of PES is less than one and greater than
zero. A change in the price of the product leads to a less change
in the quantity supplied on it.
2. Elastic supply: a change in the price of the price of the product
leads to a greater than change in the quantity supplied of it.
3. Unit elastic supply: a change in the price of the product leads to
a change in the quantity supplied of it.

Determinants of price elasticity of supply:

1. How much costs rise as output is increased
2. The time period considered:
In the short run: may be able to increase the quantity of the factors
In the long run: may be able to increase the quantity off all the factors
3. The ability to store stock: they will be able to react to price increases
with swift supply increases.
Stock= elastic
No stock= inelastic