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.

PES=%ΔQs%ΔP\text{PES} = \dfrac{\%\,\Delta\,Q_s}{\%\,\Delta\,P}

PES is the percentage change in quantity supplied divided by the percentage change in price. Both numbers are percentages, not raw unit changes. The percentage-change formula is the same as for PED:

%change=new valueold valueold value×100\% \,\text{change} = \dfrac{\text{new value} - \text{old value}}{\text{old value}} \times 100

PES is positive: the supply curve slopes upward, so a price rise produces a rise in quantity supplied. Both percentage changes have the same sign, so the ratio is positive. There is no sign-convention trap here, unlike PED.