Learning objectives
Define price elasticity of supply and calculate PES = %ΔQs ÷ %ΔP, interpreting values from perfectly inelastic to perfectly elastic
Explain the factors affecting PES: spare capacity, stocks, mobility of factors, the length of the production period and the time allowed
Explain why supply is more elastic in the long run than in the short run, using agriculture, housing and manufactured goods as examples
Analyse how PES determines how quickly and easily producers respond when market conditions change
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