1. What is Price Elasticity of Supply Coefficient?

The Price Elasticity of Supply Coefficient (E_s) measures the responsiveness of the quantity supplied of a good to a change in its price. It indicates how much the quantity supplied changes when the price changes by 1%.

2. How Does the Calculator Work?

The calculator uses the Price Elasticity of Supply formula:

Where:

• \( E_s \) — Price elasticity of supply coefficient (dimensionless)
• \( \%\Delta Q_s \) — Percentage change in quantity supplied (%)
• \( \%\Delta P \) — Percentage change in price (%)

Explanation: The coefficient shows the proportional change in quantity supplied relative to the proportional change in price.

3. Importance of Price Elasticity of Supply

Details: Understanding price elasticity of supply helps businesses and policymakers predict how changes in market prices will affect production levels, inventory management, and market equilibrium.

4. Using the Calculator

Tips: Enter the percentage change in quantity supplied and percentage change in price as decimal numbers. Both values must be valid and the percentage change in price cannot be zero.

5. Frequently Asked Questions (FAQ)

Q1: What does different E_s values indicate?
A: E_s > 1 = elastic supply, E_s = 1 = unit elastic, E_s < 1 = inelastic supply, E_s = 0 = perfectly inelastic, E_s = ∞ = perfectly elastic.

Q2: What factors affect price elasticity of supply?
A: Production time, availability of inputs, technology, storage capacity, and mobility of factors of production.

Q3: How is this different from price elasticity of demand?
A: Price elasticity of supply measures producer responsiveness, while price elasticity of demand measures consumer responsiveness to price changes.

Q4: Can E_s be negative?
A: Typically no, as supply curves are usually upward sloping, meaning quantity supplied increases with price.

Q5: How is percentage change calculated?
A: %Δ = [(New Value - Old Value) / Old Value] × 100%