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Price Elasticity of Supply
Price Elasticity of supply measures the degree of responsiveness of quantity supplied to changes in price. The co-efficient of the elasticity of supply may be stated as:
Es = Percentage change in the quantity supplied
Percentage change in price.
Mathematically, this can be written as:
Symbolically it is given by the formula Es =
Because of the positive relationship between price and quantity supplied, the price elasticity of supply ranges from zero to infinity.
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