Measurement of elasticity of Supply

Elasticity of supply can be measured by following formula:

Elasticity of supply =

=

=

= ×  

We illustrate below measurement of elasticity of supply at the point P on the supply curve SS according to the above formula.

In Fig. SS1 is the supply curve. P is any point on it. Through P a tangent is drawn meeting X-axis at T and Y-axis at t. PM is the perpendicular drawn from the point P to the X-axis at M.

Elasticity of supply =     =   

or more than unity.

 

Fig. 

Symbolically Es =  × 

Dqs – Change in Quantity Supplied

Dps – Change in Price

Es – Elasticity of Supply

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