ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Price elasticity of supply is the percentage change in the quantity of a good or service supplied divided by the percentage change in the price. Since this elasticity is measured along the supply curve, the law of supply holds, and thus price elasticities of supply are always positive numbers.

Detailed explanation-2: -The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.

Detailed explanation-3: -Elasticity of demand, measured by comparing the ratio of percentage change in the quantity demanded to the percentage change in the price of a commodity, is known as percentage method. It is one of the methods of measuring the elasticity of demand.

Detailed explanation-4: -Relatively Elastic Supply A price elasticity supply greater than one means supply is relatively elastic, where the quantity supplied changes by a larger percentage than the price change.

Detailed explanation-5: -There are numerous factors that directly impact the elasticity of supply for a good including stock, time period, availability of substitutes, and spare capacity. The state of these factors for a particular good will determine if the price elasticity of supply is elastic or inelastic in regards to a change in price.