The price elasticity of supply measures
A) the percentage change in supply from a percentage change in demand.
B) the extent to which the quantity supplied of a good changes when the price of a good changes, other things remaining the same.
C) the slope of the supply curve.
D) how the equilibrium price changes in response to a change in the equilibrium quantity supplied.
E) Both answers B and C are correct.

Question

Quizplus · Accepted Answer

The price elasticity of supply (PES) measures the responsiveness of the quantity supplied of a good to a change in its price, while other factors that affect supply remain constant. In other words, PES measures the percentage change in quantity supplied of a good resulting from a 1% change in its price. Therefore, choice B is correct. Choice A is incorrect because it refers to the elasticity of demand, not supply. Choice C is also incorrect because the slope of the supply curve is not always constant and can vary based on changes in the cost of production, technology, and other factors affecting supply. Choice D is irrelevant to the concept of PES. Finally, choice E is partially correct, but only choice B is a direct answer to the question.

The Price Elasticity of Supply Measures