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Price Elasticity of Supply questions and answers certified 2024
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Price Elasticity of Supply questions and answers certified 2024
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Price Elasticity of Supply (PES)Due to Law of Supply, PES is always what? - correct answer ✔Negative.
If PES is >1, supply is? - correct answer ✔Price elastic.
If PES is <1, supply is? - correct answer ✔Price inelastic.
If PES is = 1, supply is? - correct answer ✔Unity elastic.
If PES is = 0, supply is? - correct answer ✔Perfectly inelastic.
If PES is infinite, supply is? - correct answer ✔Perfectly elastic.
How do you calculate PES? - correct answer ✔% change in Qs / % change
in P
What does PES measure? - correct answer ✔The responsiveness to
quantity of supply when a change in price occurs.
What are the determinants of supply? - correct answer ✔PSSST -
Production lag, Stocks, Spare capacity, Substitutes, Time
What is the rule for production lag in regard to PES? - correct answer ✔The
more production lag, the more price inelastic. If lag is short, it is easier to
make supply more price elastic.
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