TAILIEUCHUNG - Lecture Element of economics - Chapter 4: Price elasticity of supply

Lecture Element of economics - Chapter 4: Price elasticity of supply. The topics discussed in this chapter are: The main contents of the chapter consist of the following: Price elasticity, the price elasticity of supply, elastic supply, inelastic supply, price elasticity of supply and shape of supply curve,. | Price Elasticity of Supply Price Elasticity The price elasticity of supply is the proportional change in quantity supplied relative to the proportional change in price. The Price Elasticity of Supply The price elasticity of supply is the percentage change in the quantity supplied divided by the percentage change in price. Elastic Supply Elastic supply means that quantity changes by a greater percentage than the percentage change in price. Inelastic Supply Inelastic supply means that quantity doesn't change much with a change in price. Price Elasticity of Supply and Shape of Supply Curve The price elasticity of supply is either zero or a positive number. A zero price elasticity of supply means that the quantity supplied will not vary as the price varies. A positive price elasticity of supply means that as the price of an item rises, the quantity supplied rises. Supply Curve Shapes and Elasticity Supply Elasticities in the Long and Short Runs The shape of the supply curve depends primarily on the length of time being considered. In the short run, at least one of the resources used in production cannot be changed. In the long run, the firm has long enough to change any aspect of production, and therefore can more fully respond. Interaction of Price Elasticities of Demand and Supply Both the price elasticity of demand and the price elasticity of supply determine the full effect of a price change. Interaction of Elasticities If the price elasticity of supply of an item is large and the demand for it is price inelastic, then the firm can raise the price without losing revenue. Interaction of Elasticities Conversely, if the price elasticity of supply is small and the price elasticity of demand is large, then the firm is unable to raise the price because the consumer will switch to another firm or product Incidence and Taxes Incidence is the measure of who actually pays for a cost increase or a tax. In general, the more elastic the demand and the less elastic the supply the more the incidence of a tax falls on businesses and the less it falls on consumers. Elasticity and Shifting Supply and Demand The more elastic the demand (supply), the greater the effect of a supply (demand) shift on quantity, and the smaller the effect on price. Effects of Shifts in Supply on Price and Quantity P0 P1 D Price Quantity S0 S1 Q0 Q1 P0 P1 D Price Quantity S0 S1 Q0 Q1 Inelastic Demand Elastic Demand akpe na mi!

• Kinh tế học
• Element of economics
• Lecture Element of economics
• Economic systems
• Price elasticity
• Price elasticity of supply
• Inelastic supply
• Economics problems
• Macroeconomic issues
• Opportunity cost
• Supply analysis
• Demand analysis
• Individual demand
• Elasticity analysis
• Sensitivity analysis
• Long run costs
• Long run average costs
• Short run average costs
• Market structures
• Perfect competition
• Monopolistic competition
• Lecture Economics
• Price eElasticity of demand
• Perfectly inelastic demand
• Demand curve
• Unitary elastic demand curve