Elasticity of Supply:-
Elasticity of supply or price elasticity of supply refers to the degree of responsiveness of quantities supplied to changes in the product's own price. Price elasticity of supply (Es) is calculated as -
Es = percentage change in quantity supplied
÷ percentage change in price
= ∆Q/Q ÷ ∆P/P
= ∆Q/Q × P/∆P
= ∆Q/∆P × P/Q
Types of Price Elasticity of Supply:-
Elasticity of supply or price elasticity of supply are generally of five types as given below-
a. Perfectly Inelastic Supply
b. Perfectly Elastic Supply
c. Unitary Elastic Supply
d. Inelastic Supply
e. Highly Elastic Supply
Perfectly Inelastic Supply:-
The supply of a product or commodity is perfectly inelastic when the quantity supplied does not change at all in response to the change in it's price.
Perfectly Elastic Supply:-
The supply of a product or commodity is perfectly elastic when the quantity supplied changes irrespective of and changes in its price.
Unitary Elastic Supply:-
The supply of a product or commodity is said to be unitary elastic when due to there is equal percentage change in supply to percentage change in it's price.
Inelastic Supply:-
Supply is said to be inelastic when the percentage change in quantity supply is less than the percentage change in its price.
Highly Elastic Supply:-
Supply is said to be highly elastic when the percentage change in supply is greater than the percentage change in its price.
Related Articles:-
Introduction to Microeconomics Part 1
Introduction to Microeconomics Part 2
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