Supply Elasticity.

Slides:



Advertisements
Similar presentations
AAEC 2305 Fundamentals of Ag Economics Market Supply.
Advertisements

Chapter 5 Some Applications of Consumer Demand, and Welfare Analysis.
Chapter 20 - Demand and Supply Elasticity1 Learning Objectives  Express and calculate price elasticity of demand  Understand the relationship between.
Elasticities. Objectives Students will be able to Calculate the elasticity of demand. Calculate the value at which total revenue is maximized. Determine.
Price elasticity of Supply
MR. REY BELEN PRICE ELASTICITY OF SUPPLY. Supply Price and Quantity Demanded are directly related to each other. An increase in price causes the quantity.
Supply Elasticity. Elasticity of Supply, Is the percentage change in quantity supplied associated with a percentage change in price. Es = %  Qs / % 
Chapter 4: Elasticity of Demand and Supply
Law of Supply and Elasticity of Supply Supply: the amount of goods available.
Chapter 20: Demand and Supply Elasticity
1 Price Elasticity of Demand  In order to predict what will happen to total expenditures,  We must know how much quantity will change when the price.
Elasticity of Demand. What goods would you always find money to buy even if the price were to raise drastically? What goods would you cut back on, or.
Section 14.3 Further Business Application: Elasticity of Demand.
Chapter 5 Section 1.  Supply – the amount of goods available  Law of Supply ◦ Producers offer more of a good as its price increases and less as its.
Elasticity of supply By Mr. Swatanter Singh PGT (ECO.) KV Leh-Ladakh.
Lesson Objectives: By the end of this lesson you will be able to: *Explain the law of supply. *Interpret a supply schedule and a supply graph. *Examine.
1 Essential Question: Explain why supply is considered to be “producer” controlled, describe the relationship between supply and price according to the.
Elasticity. Elasticity measures how sensitive one variable is to a change in another variable. –Measured in terms of percentage changes, elasticity tells.
Supply Chapter 4 Price Effect Market Supply Price Elasticity Change in Supply.
21-1 Demand and Supply Elasticity Should relatively substantial decreases in the prices of illicit drugs motivate concerns than consumption of these drugs.
SUPPLY CHAPTER 5. LAW OF SUPPLY SUPPLY: AMOUNT OF GOODS AVAILABLE SUPPLY: AMOUNT OF GOODS AVAILABLE PRICE INCREASES: SUPPLY INCREASES PRICE INCREASES:
Elasticity of Supply.
PRICE ELASTICITY OF SUPPLY. PRICE ELASTICITY OF SUPPLY AND DEMAND Lets think about this for a second…
Chapter 4 Section 3 Elasticity of Demand. Elasticity of demand is a measure of how consumers react to a change in price. What Is Elasticity of Demand?
Elasticity of Supply Unit 5.4. Elasticity and Supply Elasticity with supply works just like elasticity with demand. Suppliers look at the amount of change.
Chapter 5.1/5.3/5.4 Supply. Intro to Supply Supply – the amount of a product offered for sale at all possible prices Law of Supply – as P goes up, Qs.
Supply Elasticity. Remember, Supply means the goods and products that are being brought to the market for sale. Supply elasticity – how changes in price.
Supply ©2012, TESCCC Economics Unit 4, Lesson 1. Objectives 1.Define supply. 2.Explain the law of supply. 3.Analyze the relationship between cost of production.
Chapter 4 Section 3 It’s Elastic Time to do the slide…
Elasticity of Demand. Dictates how drastically buyers will cut back or increase their demand for a good when the price changes What does this mean? 
Price elasticity of demand (PED) (1) Lesson aims: To be able to calculate price elasticity of demand for a good To understand the meaning of a good being.
Consumer Choice and Elasticity
Price Elasticity of demand
SECTION A: THE MARKET SYSTEM
Price Elasticity of Demand
Understanding Supply & The Supply Curve Shifts
Supply Elasticity.
Chapter 5, Section 1 What is Supply?.
Supply.
Price Elasticity of Demand
Elasticity of Supply.
Increase in total revenue Decrease in total revenue
Elasticity of Supply Unit 2.
Elasticity.
© EMC Publishing, LLC.
Chapter 5.1/5.3/5.4 Supply.
Demand and Supply Elasticity
Chapter 5: Supply Section 1
© EMC Publishing, LLC.
Supply.
Price Effect Market Supply Price Elasticity Change in Supply
Supply Unit 2: Supply and Demand.
Understanding Supply.
Chapter 4 Supply and Demand.
Chapter Four: Elasticity.
Graphing Supply.
Chapter 5: Supply Section 1
CH. 7 Section 1 Supply.
Producers and Supply.
Supply Unit 2: Supply and Demand.
SUPPLY Chapter 5.
Chapter 5: Supply Section 1
Supply Economics Unit 4, Lesson 1
An Introduction to Supply
Chapter 5: Supply Section 1
Chapter 5: Supply Section 1
EXHIBIT 1 The Impact of a Decrease in Price on Total Revenue
Chapter 5: Supply Section 1
Marginal, Average & Total Revenue
Chapter 5: Supply Section 1
Presentation transcript:

Supply Elasticity

Elasticity of Supply, Es = %  Qs / %  P Is the percentage change in quantity supplied associated with a percentage change in price. Es = %  Qs / %  P

Es = QS X P0 P Q0

Interpreting Elasticity of Supply If Es > 1  elastic supply Es < 1  inelastic supply Es = 1  unitary elastic supply

If the Supply curve is a straight line: If the supply curve cuts the price axis (Y), then supply is ELASTIC Qs/ut

If the Supply curve is a straight line: If the supply curve cuts the quantity axis (X), then supply is INELASTIC Qs/ut

If the Supply curve is a straight line: If the supply curve comes out of the origin, then supply is UNITARY ELASTIC Qs/ut

Sections of Elasticity Es > 1 P S Less Elastic More Elastic Qs/ut

Sections of Elasticity Es < 1 P S Less Inelastic More Inelastic Qs/ut

Time and Elasiticy of Supply The longer the time period for adjustment, the more price elastic is the supply curve.

The longer the time allowed for adjustment to a  Price, the more firms are able to figure out ways to increase or decrease production in an industry.

The longer the time allowed for adjustment to a  Price, a The longer the time allowed for adjustment to a  Price, a greater amount of resources can flow into or out of an industry by means of expansion or contraction of existing firms.