What is price elasticity of supply?
A) It is the percentage change in the quantity supplied of a good or service divided by the percentage change in the price of the good or service.
B) It is a measure of consumers' responsiveness to a change in price.
C) It is the absolute value of the quantity supplied of a good or service and is always a negative number.
D) It is the percentage change in the price of a good or service divided by the percentage change in the quantity supplied of the good or service.

Question

Quizplus · Accepted Answer

Price elasticity of supply is a measure of how much the quantity supplied of a good or service changes in response to a change in its price. It is calculated as the percentage change in the quantity supplied of the good or service divided by the percentage change in its price. This calculation gives a numerical value that represents the elasticity of supply. A value greater than 1 means that the supply is elastic, meaning that a small change in price leads to a larger change in quantity supplied; a value less than 1 means that supply is inelastic, meaning that a change in price leads to a proportionally smaller change in quantity supplied.

What Is Price Elasticity of Supply