Question

11.The price elasticity of supply is

the percentage change in the price divided by the percentage change in quantity supplied.

constant across the short run and long run.

always negative.

the slope of the supply curve.

the percentage change in the quantity supplied divided by the percentage change in price.

Answer 1

Supply

Just like demand, supply is also expressed as a relationship between price and quantity

Supply refers to the quantity of a commodity that a firm is willing and able to offer for sale at a given price during a given period of time.

The definition of supply highlights 4 essential elements:

(i) Quantity of a commodity

(ii) Willingness to sell

(iii) Price of the commodity

(iv) Period of time

Price elasticity of supply

Price elasticity of supply points out the reaction of the sellers to a particular change in the price of the commodity. It explains the quantitative changes in the supply of a commodity, due to a given change in the price of the commodity

Price elasticity of supply refers to the degree of responsiveness of supply of a commodity with reference to change in the price of such commodity.

Now Coming to the question

The price elasticity of supply is the percentage change in the quantity supplied divided by the percentage change in price

This is known as the percentage method of price elasticity of supply

It is denoted as

Price elasticity of supply (E_s) = Percentage change in quantity Supplied / Percentage change in Price

Hence 5th option is correct which the percentage change in the quantity supplied divided by the percentage change in price