Enter the total change in quantity shipped and the change in price into the calculator. The calculator will evaluate a display the price elasticity of supply.
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Price Elasticity of Supply Formula
The following equation can be used to calculate the price elasticity of supply.
Price Elasticity of Supply = % Change in Quantity Supplied / % Change in Price
Price Elasticity of Supply Definition
Price elasticity of supply is how a change in supply is affected by a change in price. Most often it’s used to analyze how much of a product to produce based on the previous history of supply and prices.
Price Elasticity of Supply Example
How to calculate price elasticity of supply?
- First, determine the change in quantity shipped.
Calculate the total change in percentage of the number of goods shipped.
- Next, determine the change in price.
Calculate the change in price that was associated with the change in shipped goods.
- Finally, calculate the price elasticity of supply.
Calculate the price elasticity of supply using the equation above.
Price elasticity of supply measures the change in supply that occurs with a change in the price of a product.