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Price Elasticity of Supply - Coggle Diagram
Price Elasticity of Supply
Es = Percentage change in quantity supplied of product X divided by the percentage change in price of product X
Midpoint formula
Elastic Supply
Produsers are responsive to price changes
Inelastic Supply
Producers are not as responsive to price changes
Price elasticity and time
Primary determinant
Time periods
Immediate market period
Insufficient time to change output
Short run
Plant capacity is fixed, some inputs can be changed
Long run
All inputs can be changed
Es = 1 Supply is Unit Elastic
Es < 1 Supply is Inelastic
Es > 1 Supply is Elastic
Es = 0 Supply is Perfectly Inelastic
Applicarions
Reproductions = More Elastic
Volitile Gold Prices = Inelastic
Antiques = Inelastic
Measures sellers responsiveness to price changes