Scribd Logo
Upload

Welcome to Scribd!

  • 59 views

    What Is Supply Curve?: Elasticity and Supply Intercept

    Uploaded by

    Meenal Pachory Pandey
    The document discusses supply curves and price elasticity of supply. It defines a supply curve as a graphic representation showing the relationship between the price of a product and the quantity a seller is willing to supply. Price elasticity of supply measures how responsive the quantity supplied is to changes in price. There are five alternatives for elasticity of supply - perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic - which are determined by the slope and intercept of the supply curve graph.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    What Is Supply Curve?: Elasticity and Supply Intercept

    Uploaded by

    Meenal Pachory Pandey
    59 views5 pages
    The document discusses supply curves and price elasticity of supply. It defines a supply curve as a graphic representation showing the relationship between the price of a product and the quantity a seller is willing to supply. Price elasticity of supply measures how responsive the quantity supplied is to changes in price. There are five alternatives for elasticity of supply - perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic - which are determined by the slope and intercept of the supply curve graph.

    Original Description:

    Managerial economics

    Original Title

    Elasticity

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses supply curves and price elasticity of supply. It defines a supply curve as a graphic representation showing the relationship between the price of a product and the quantity a seller is willing to supply. Price elasticity of supply measures how responsive the quantity supplied is to changes in price. There are five alternatives for elasticity of supply - perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic - which are determined by the slope and intercept of the supply curve graph.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    59 views5 pages

    What Is Supply Curve?: Elasticity and Supply Intercept

    Uploaded by

    Meenal Pachory Pandey
    The document discusses supply curves and price elasticity of supply. It defines a supply curve as a graphic representation showing the relationship between the price of a product and the quantity a seller is willing to supply. Price elasticity of supply measures how responsive the quantity supplied is to changes in price. There are five alternatives for elasticity of supply - perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic - which are determined by the slope and intercept of the supply curve graph.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    What is Supply Curve?

    supply curve, in economics, graphic representation of the relationship


    between product price and quantity of product that a seller is willing and
    able to supply. Product price is measured on the vertical axis of the graph
    and quantity of product supplied on the horizontal axis.

    What is Price Elasticity of Supply?

    Price elasticity of supply (PES or Es) is a measure used in economics to show


    the responsiveness, or elasticity, of the quantity supplied of a good or
    service to a change in its price.

    Factors that influence the elasticity of supply include the ability to switch to
    production of other goods, the ability to go out of business, the ability to use
    other resource inputs and the amount of time available to respond to a price
    change.

    Elasticity And Supply Intercept:

    The positioning of a supply curve relative to the price and quantity axes
    indicates the price elasticity of supply. A straight-line supply curve does not
    contain all five elasticity alternatives. Nature of a supply curve is revealed by
    the intersection with the vertical price axis and/or horizontal quantity axis.

    There are Five Elasticity Alternatives -

    Alternative Coefficient (E)


    Perfectly Elastic E = ∞
    Relatively Elastic 1 < E<∞
    Unit Elastic E = 1
    Relatively Inelastic 0 < E<1
    Perfectly Inelastic E = 0

    1. Perfectly Elastic: The coefficient of elasticity for this alternative is E = ∞.


    It's a perfectly elastic supply curve, which is horizontal and intersects the
    vertical price axis.
    2. Relatively Elastic: The coefficient of elasticity for this alternative is in the
    range of 1 < E < ∞.It's elastic supply curve, which is flat but not horizontal and
    intersects the price axis.

    3. Unit Elastic: The coefficient of elasticity for "Unit Elastic" is in the range of E
    = 1. It reveals a unit elastic supply curve, which is a straight line extending
    from the origin. Means, If the coefficient is exactly one, the good is said to be
    unitary elastic. It can be said as if the supply curve is a straight line
    passing through the origin, then the price elasticity of supply will be
    equal to unity.

    4. Relatively Inelastic: The coefficient of elasticity for this alternative is in the


    range of 0 < E < 1. It's a relatively inelastic supply curve, which is steep but
    not vertical and intersects the quantity axis.

    5. Perfectly Inelastic: The coefficient of elasticity for this alternative is E = 0.


    It's a perfectly inelastic supply curve, which is vertical and intersects the
    horizontal quantity axis.
    Graphical Representation of Price Elasticity of Supply and Five Elasticity

    Alternatives of Supply Curve

    You might also like