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Elasticity of Supply |
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Description of Elasticity of Supply. Explanation. |
Definition Elasticity of Supply. Description.
Elasticity of Supply is the responsiveness of the quantity supplied of a good to a given change in price (Compare: Bullwhip Effect).
The (price) elasticity of supply can be calculated as the percentage change in supply that occurs in response to a percentage change in price. For example, if, in response to a 15% rise in the price of a good, the quantity supplied increases by 30%, the price elasticity of supply would be 30% / 15% = 3. |
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End of description Elasticity of Supply. An explanation. |
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