Kinh tế học - Price elasticity of supply

Price Elasticity of SupplyPrice Elasticity The price elasticity of supply is the proportional change in quantity supplied relative to the proportional change in price.The Price Elasticity of SupplyThe price elasticity of supply is the percentage change in the quantity supplied divided by the percentage change in price.Elastic SupplyElastic supply means that quantity changes by a greater percentage than the percentage change in price.Inelastic SupplyInelastic supply means that quantity doesn't change much with a change in price.Price Elasticity of Supply and Shape of Supply Curve The price elasticity of supply is either zero or a positive number.A zero price elasticity of supply means that the quantity supplied will not vary as the price varies.A positive price elasticity of supply means that as the price of an item rises, the quantity supplied rises.Supply Curve Shapes and ElasticitySupply Elasticities in the Long and Short RunsThe shape of the supply curve depends primarily on the length of time being considered.In the short run, at least one of the resources used in production cannot be changed. In the long run, the firm has long enough to change any aspect of production, and therefore can more fully respond.Interaction of Price Elasticities of Demand and Supply Both the price elasticity of demand and the price elasticity of supply determine the full effect of a price change.Interaction of ElasticitiesIf the price elasticity of supply of an item is large and the demand for it is price inelastic, then the firm can raise the price without losing revenue.Interaction of ElasticitiesConversely, if the price elasticity of supply is small and the price elasticity of demand is large, then the firm is unable to raise the price because the consumer will switch to another firm or productIncidence and TaxesIncidence is the measure of who actually pays for a cost increase or a tax. In general, the more elastic the demand and the less elastic the supply the more the incidence of a tax falls on businesses and the less it falls on consumers.Elasticity and Shifting Supply and DemandThe more elastic the demand (supply), the greater the effect of a supply (demand) shift on quantity, and the smaller the effect on price.Effects of Shifts in Supply on Price and QuantityP0P1DPriceQuantityS0S1Q0Q1P0P1DPriceQuantityS0S1Q0Q1Inelastic DemandElastic Demand akpe na mi!