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Hodder & Stoughton Limited 2015Price elasticity of supplyAS/Year 1 Microeconomics tutorialAQA A-level EconomicsPrice elasticity of supply(PES)PES measures the responsiveness of quantity supplied to a change in price

Formula:

percentage change in quantity supplied percentage change in price

AS/Year 1 Microeconomics Hodder & Stoughton Limited 20152

AQA A-level EconomicsElastic or inelastic?Elastic supplyIf the firm is able to increase supply quickly in response to a change in price, then supply is said to be price elastic in supply

Inelastic supplyIf the firm is unable to increase supply quickly in response to a change in price, then supply is said to be price inelastic in supply

AS/Year 1 Microeconomics Hodder & Stoughton Limited 20153

AQA A-level EconomicsFactors determining PESTime

Weather conditions

Ease of access to specialist equipment

Planning permission and other government restrictions

Stocks

Spare capacity

AS/Year 1 Microeconomics Hodder & Stoughton Limited 20154

AQA A-level EconomicsShort and long-run supplyAS/Year 1 Microeconomics Hodder & Stoughton Limited 20155

AQA A-level Economics