(3) Price Elasticity of Supply
Elasticity, Price Elasticity, Sensitivity, Responsiveness, How Much
This examines the concept of Price Elasticity of Supply. Various approaches to calculation of a price elasticity are identified. The interpretation of this elasticity index is explained. There is a discussion of how this price elasticity is related to supply curves, both their general shapes and at different locations along a linear supply curve. Finally, this identifies and explains the major factors or issues that tend to make the price elasticity of supply either high or low.
Crane, Steven E., "(3) Price Elasticity of Supply" (2011). Principles of Microeconomics. 23.
Understanding of the concept of price elasticity of supply. Ability to calculate and interpret a price elasticity value. Ability to explain how price elasticity relates to the shape of a supply curve. Ability to identify general factors or situations that would tend to make supply of a product either more or less price elastic. Ability to explain the logic behind these relationships.
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