Your SlideShare is downloading. ×
PRICE ELASTICITY OF SUPPLY WITH EXAMPLES
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

PRICE ELASTICITY OF SUPPLY WITH EXAMPLES

27,853
views

Published on

Published in: Education, Business, Technology

1 Comment
3 Likes
Statistics
Notes
  • It is not in a downloadable method. So it is ....... Even the slide share does not provide the benefit.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total Views
27,853
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
381
Comments
1
Likes
3
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • We use percentages so it doesn’t matter which unit of measure we are using. The concept of price elasticity also applies to supply. The elasticity formula is the same as that for demand, but we must substitute the word “supplied” for the word “demanded” everywhere in the formula. Just like with price elasticity of demand, we will compute the price elasticity of supply using the midpoint formula.
  • Transcript

    • 1. SHAHI RAZ AKHTAR PRICE ELASTICITY OF SUPPLY BS COMMERCE IST SEMISTER
    • 2.
      • MEASURES THE RESPONSIVENESS OF SUPPLY TO A CHANGE IN PRICE.
      Price Elasticity of Supply DEF:- THE RATIO BETWEEN % CHANGE IN QUANTITY SUPPLIED TO THE % CHANGE IN PRICE.
    • 3. Price Elasticity of Supply Remember: Es = coefficient of price elasticity QS = Quantity Supplied P = Price PES = % ∆Q S % ∆P Percentage Change in Quantity Supplied Percentage Change in Price PE S =
    • 4.
      • PE s > 1 supply is elastic
      • PE s < 1 supply is inelastic
      • PEs = 1 Unitary Elastic
      • PEs= ∞ Totally Elastic
      • PEs= 0 Totally In-Elastic
    • 5. Figure 1. Elastic Supply Curve PRICE P1 P2 0 Q1 Q2 S QUANTITY
    • 6. Figure 2. Inelastic Supply Curve PRICE P1 P2 0 Q1 Q2 S QUANTITY
    • 7. Figure 3. Unitary Supply Curve PRICE P1 P2 0 Q1 Q2 S QUANTITY
    • 8. Figure 4. Perfectly Elastic Supply Curve PRICE P1 0 S QUANTITY
    • 9. Figure 5. Perfectly Inelastic Supply Curve PRICE P1 P2 0 S QUANTITY
    • 10.
      • 1- TIME
      • 2- PRODUCTION CAPACITY
      • 3- PRODUCER OR CHIEF
      • 4- STORED PRODUCTS
      FACTORS That affect PRICE ELASTICITY OF SUPPLY
    • 11. Problem #1
      • An individual used to raise 10 bags which sell on the market at a minimum of $8 each. For some reasons, the market price per bag reached $10. He decided to raise 20. Let us find out how elastic or responsive the production was to price.
    • 12. Given variables?
      • Qs1 = 10
      • P1 = $8 each
      • Qs2 = 20
      • P2 = $10
      • ∆ Qs = ? ; ∆P = ?
      • PES = ?
    • 13. Q2-Q1 20-10 10 ∆ QS = = = = 1 Q1 10 10 P2-P1 10-8 2 ∆ P = = = = 0.25 P1 8 8
    • 14. ∆ Qs 1 PES = = = 4 ∆ P 0.25
      • We conclude that the PEOS is 4 .
      • So PEOS is used to see how responsive or sensitive is supply of a good to change in price.
    • 15. [email_address] PATHANKING 12 @YAHOO.COM THE END