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Lecture notes

Price Elasticity of Supply (PES)
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In this section we look at how we calculate PES, using numerical examples as well as the interpretation of the PES figure. We also look at the different degrees of elasticity. Furthermore, we look at the factors which affect the PES.

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  • April 23, 2024
  • 24
  • 2023/2024
  • Lecture notes
  • Self
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Grade 10


Unit 2.8 –
Price Elasticity
of Supply (PES)

, Price Elasticity of Supply (PES)

 PES measures the extent to which the quantity supplied changes when the
price of the product changes.




 Example:

As the price of good A rises from Rs 20 to Rs 25, suppliers increase their supply
from 300 to 450 units.

(i) Calculate PES.
(ii) Interprete the value obtained for the PES.
(iii) Draw the supply curve for good A.



2
Mr G. DHONDOO

, PES – Elastic Supply


(i) Calculate PES


(450 – 300) x 100
300 + 50 %
= = + 2.0
(25 – 20) x 100 + 25 %
20

The positive sign confirms the
positive/direct relationship between
price and quantity supplied.



3
Mr G. DHONDOO

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