Calculating PES Step by Step — Price Elasticity of Supply (PES) | IGCSE Economics

Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 10% of your exam marks.

stable

Medium

Stable10%

PES definition, formula, calculation, and determinants appear on most papers; typically 4 to 6 marks paired with PED or market analysis questions.

A typical 4-mark "calculate PES" question rewards a clear three-step method plus a one-line interpretation.

Step 1. Calculate the percentage change in quantity supplied.

Step 2. Calculate the percentage change in price.

Step 3. Divide: PES = %ΔQs ÷ %ΔP.

Step 4. Interpret the result: say whether supply is elastic (PES > 1) or inelastic (PES < 1).

Worked example

Calculate and interpret price elasticity of supply

A bakery currently produces 600 loaves per week at a price of $2.00 per loaf. When the price rises to $2.50, the bakery increases output to 720 loaves per week. Calculate the price elasticity of supply and state whether supply is elastic or inelastic.

Solution:

% change in quantity supplied = (720 − 600) ÷ 600 × 100 = +20%
% change in price = (2.50 − 2.00) ÷ 2.00 × 100 = +25%
PES = 20% ÷ 25% = 0.8
Because PES < 1, supply is price-inelastic: quantity supplied rises by a smaller percentage than price.