Enter the percentage change in supply (%) and the percentage change in price (%) into the Calculator. The calculator will evaluate the PES.

PES Formula

PES = S / P

Variables:

  • PES is the Price Elasticity of Supply ()
  • S is the percentage change in supply (%)
  • P is the percentage change in price (%)

To calculate PES, divide the percentage change in supply by the percentage change in price.

How to Calculate Price Elasticity of Supply?

The following steps outline how to calculate the PES.

  • First, determine the percentage change in supply (%). 
  • Next, determine the percentage change in price (%). 
  • Next, gather the formula from above = PES = %S / %P.
  • Finally, calculate the Price Elasticity of Supply.
  • After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

percentage change in supply (%) = 30

percentage change in price (%) = 40

FAQ

What factors can influence the Price Elasticity of Supply (PES)?

Several factors can influence PES, including the availability of raw materials, the time frame for production, the mobility of factors of production, and the ability to store stock.

How does the Price Elasticity of Supply differ from the Price Elasticity of Demand?

While the Price Elasticity of Supply measures how much the quantity supplied of a good responds to a change in its price, the Price Elasticity of Demand measures how much the quantity demanded of a good responds to a change in its price.

Why is understanding Price Elasticity of Supply important for businesses?

Understanding PES helps businesses make informed decisions about pricing strategies, production levels, and inventory management based on how responsive their supply is to price changes.

Can the Price Elasticity of Supply be negative?

No, the Price Elasticity of Supply is typically positive, indicating that an increase in price leads to an increase in quantity supplied. A negative PES would imply that higher prices lead to a decrease in quantity supplied, which is uncommon.