Class 12 Micro Economics - Chapter The Theory of the Firm under Perfect Competition NCERT Solutions | What does the price elasticity of supply

Welcome to the NCERT Solutions for Class 12th Micro Economics - Chapter The Theory of the Firm under Perfect Competition. This page offers a step-by-step solution to the specific question from Excercise ".$ex_no." , Question 18: what does the price elasticity of supply mean how....
Question 18

What does the price elasticity of supply mean? How do we measure it?

Answer

Price elasticity of supply (es ) is defined as the degree of the responsiveness of quantity supplied, to the change in the price of a good.
It is expressed as:
es =
=
=
Where,
∆Q = change in quantity supplied
∆P = change in price
P = initial price
Q = initial supply

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