Chapter 2 demand and supply. PDF

Title	Chapter 2 demand and supply.
Course	Introduction to Economics
Institution	Universiti Teknologi MARA
Pages	1
File Size	114.8 KB
File Type	PDF
Total Downloads	287
Total Views	827

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Summary

PRICE ELASTICITY OF SUPPLY , EsDefinition: the responsiveness of the change in quantity supply due to the change in price. Formula: Es = Q2- Q1 x PQ1 P2-PFormula: Es = % change in qty supplied% change in priceElastic Inelastic Unitary elastic Perfectly elastic Perfectly inelasticS...

Description

P  RICE ELASTICITY OF SUPPLY, Es Definition: the responsiveness of the change in quantity supply due to the change in price.

Elastic

Inelastic

Seller is very responsive with the change in price. When there is a slight increase in price seller will sell more of the product because their product is easily produced

Seller is less responsive with the change in price. When there is a large increase in price seller will sell less because to produce their product will take time

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Price elasticity coefficient is greater than 1 (εs >1) Percentage change in Price is less than percentage change in Qs. Supply curve is flatter

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Price elasticity coefficient is smaller than 1 (εs 1)

(εs...