elasticity of supply
Understand the Problem
The question is asking for information about the concept of elasticity of supply, which refers to how the quantity supplied of a good or service changes in response to a change in its price. This concept is important in economics and helps to understand market behaviors.
Answer
It measures the sensitivity of quantity supplied to changes in price, calculated as the percentage change in quantity supplied divided by the percentage change in price.
The price elasticity of supply measures how sensitive the quantity supplied of a good is to changes in price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.
Answer for screen readers
The price elasticity of supply measures how sensitive the quantity supplied of a good is to changes in price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.
More Information
The concept is crucial for understanding how supply responds to price changes, which is important for businesses and policymakers in planning and decision-making.
Tips
Confusing elasticity of supply with elasticity of demand is common. Ensure clarity by focusing on the supply side for this concept.
Sources
- Introduction to Price Elasticity of Supply - Khan Academy - khanacademy.org
- How Does Price Elasticity Affect Supply? - Investopedia - investopedia.com
- Price elasticity of demand and price elasticity of supply (article) - Khan Academy - khanacademy.org
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