Glossary · Micro · Elasticity

Price elasticity of supply (PES)

How strongly quantity supplied responds to a change in price, measured as the percentage change in quantity supplied divided by the percentage change in price. Supply is more elastic when firms can raise output cheaply and have time to do it.

Also called: PES, elasticity of supply

Taught in: What Is PES?

Related terms

Determinants of PESPrice elasticity of demand (PED)Tax incidence

More from elasticity

Cross-price elasticity of demand (XED)Determinants of PEDElastic demandIncome elasticity of demand (YED)Inelastic demandLuxury goodMidpoint formula

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