Definition
- Price elasticity of supply
- The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.
- Not to be confused with: Price elasticity of demand
- The price elasticity of demand is the percentage change in the quantity demanded divided by the percentage change in price.
Test yourself
What is the difference between price elasticity of supply and price elasticity of demand?
Both divide by the percentage change in price, but one measures the sellers' response and the other the buyers'.