0455
Price Elasticity of Supply (PES)
Allocation of Resources · 3 question types
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.
The shape of the supply curve on a diagram tells you, at a glance, roughly what PES looks like.
| Shape of supply curve | PES |
|---|---|
| Vertical line | Perfectly inelastic (PES = 0) |
| Steep (close to vertical) | Inelastic (PES < 1) |
| Straight line through the origin (any slope) | Unit elastic (PES = 1) |
| Shallow (close to horizontal) | Elastic (PES > 1) |
| Horizontal line | Perfectly elastic (PES = ∞) |
A useful trick for these diagrams: any supply curve that passes through the origin is unit elastic (PES = 1) along its entire length, regardless of its slope. This is a quirk of the geometry that examiners occasionally test in multiple-choice questions.