Price Elasticity of Supply Equation

The price elasticity (PES) is a measure of economics which says about the ratio of change in the quantity supplied to the percentage change in price. The given below is the price elasticity of supply formula for calculating the percentage of responsiveness for the change in price. As per the PES Formula to find the PES, just divide the change in quantity by the change in price. To know it in percentage just multiply the obtained value of PES with 100.

PES Formula

Formula:

Change in Quantity (%) = ((N - O) / O) × 100
Change in Price (%) = ((P - Q) / Q) × 100
Price Elasticity Of Supply (%) = (Change in Quantity / Change in Price) × 100


Where,
N = New Quantity
O = Original Quantity
P = New Price
Q = Original Price

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To find the PES using this price elasticity of supply equation, initially you need to calculate the percentages of change in quantity and change in price. An elasticity of zero denotes that the quantity of goods supplied does not show any responsiveness to the change in price.


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