Price elasticity of supply (PES)

A product has a price elasticity of supply of +2. As a result of a price change, the quantity supplied increases from 100 units to 120 units. What is the change in price?

May/June 2015

China is the world’s biggest producer of gold, whereas India is the world’s biggest buyer of gold. Gold mining in China is becoming more capital-intensive, which is causing the supply of gold to be less price inelastic. Wages for workers in the industry are rising, but other production costs are falling.

May/June 2015

When the price rose from $5 per kilo to $6 per kilo, a chicken farmer raised supply from $400 kilos to $500 kilos each week. Calculate the price elasticity of supply.

May/June 2017

The diagram illustrates the supply curve for a good. What is the price elasticity of supply when the price rises from $\$2$ to $\$4$?

May/June 2018

The diagram displays the supply curve for a good. What is the price elasticity of supply when the price increases from $2$ to $4$?

May/June 2018

In England, football stadiums are generally constructed and paid for by the private sector, whereas in some countries the state builds and funds them. On match days, many football stadiums in the English Premier League are full. In the short run, the supply of seats is perfectly inelastic. The clubs could, in fact, increase prices, still sell their tickets and therefore increase their profits. Premier League footballers currently earn very high wages.

May/June 2018

When the price rose from $\$5$ per kilo to $\$6$ per kilo, a farmer increased supply from $400$ kilos to $500$ kilos each week. What value of the price elasticity of supply is shown?

May/June 2021

As the price rose from $5 per kilo to $6 per kilo, a farmer raised supply from 400 kilos to 500 kilos each week. What is the price elasticity of supply?

May/June 2021

A business has a high price elasticity of supply for its product. What does this suggest?

May/June 2022

Which formula should be used to calculate price elasticity of supply?

May/June 2023

Following a rise in price from $\$5$ per kg to $\$6$ per kg, a farmer raised supply from $400$ kg each week to $500$ kg per week. What is the price elasticity of supply?

May/June 2024

The price elasticity of supply (PES) of coffee is $+0.2$ in the current year and $+2.0$ over the long run. Why does the PES of coffee become higher in the long run?

May/June 2025

Which good is likely to have the greatest price elasticity of supply?

May/June 2025

In many countries, the cost of dental treatment is rising. For instance, the average charge for filling a tooth is $\$180$ in the US. The number of dentists in the US is also rising. In the US, the tertiary sector employs the biggest share of the labour force. Changes in price affect the supply of products in the tertiary sector, and they also affect the primary and secondary sectors.

Oct/Nov 2018

It is forecast that electric-powered driverless cars will be on the roads by 2030. Driverless cars have already been trialled on roads in some cities, including Pittsburgh in the USA. It is believed that driverless cars will cut accidents, have lower repair costs and produce less pollution. At the start, supply of driverless cars may be greater than demand, but they are expected to become popular quite quickly. As more driverless cars are used, demand for bus travel and petrol stations may fall, and some taxi drivers may lose their jobs. By contrast, because driverless cars will give more people, including the elderly, easier access to transport, demand for out of town restaurants and places of entertainment is likely to rise. It has been predicted that the technology being developed for driverless cars will make their supply elastic. A rise of $8\%$ in the price of driverless cars is predicted to lead to a $20\%$ increase in the quantity supplied. Technological progress and the substitution of workers by machines are expected to eliminate $80$ million jobs in the USA. Job losses are also forecast in other countries, and trade unions are likely to find it harder to resist this because membership is falling and governments are reducing the power of trade unions. Occupations thought to face risk include accountants, train drivers and financial advisers. Demand for workers in other jobs, including doctors and dentists, may rise, but unemployment may still increase. The better educated workers are, the more readily they can switch from one occupation to another. Table 1.1 shows education spending as a percentage ($\%$) of GDP and the unemployment rate in selected countries. Jobs selling houses and flats may fall, but demand for building workers is expected to rise. Some people approve of house building in their area, while others are against it.

Oct/Nov 2019

The diagram illustrates the supply curve for a good. What is the price elasticity of supply when the price increases from $10$ to $12$?

Oct/Nov 2020

Uzbekistan's cotton and gas are two of its leading industries. In cotton production, Uzbekistan ranks seventh in the world and fifth for exports. The Uzbek government has tried to alter the cotton industry's price elasticity of supply, and it has almost removed child labour from cotton production. Gas output in the country rose by 7% in 2018, while the average cost of gas production fell.

Oct/Nov 2021

Which factor might affect the price elasticity of supply for a product?

Oct/Nov 2022

Developments in technology have altered the ways trees (wood) are felled, moved and then turned into furniture, for example tables. Wood has inelastic supply. Wood may be supplied under every economic system. By contrast, public goods are not provided in a market economic system.

Oct/Nov 2022

The markets for four products are each in equilibrium. The table shows the price elasticity of supply (PES) for every product. Demand for each product moves rightward by 5000 units at all prices. Which product will experience the greatest rise in price?

Oct/Nov 2023

In the US, meat supply from emus, a large bird, is price-elastic. Recently, US farmers have shifted to other livestock and crop production, which has altered their demand for labour. Their choices are also shaped by government subsidies for producing selected food items. Some people are unwilling to work as farm labourers because they believe living standards in rural areas are low.

Oct/Nov 2023

In the diagram, which line is used to represent perfectly inelastic supply?

Oct/Nov 2024

If the price of butter rises by 10%, the quantity supplied of butter rises by 20%. What is the price elasticity of supply (PES) of butter?

Oct/Nov 2025

The price of fish has risen from $3.00 to $4.80. The quantity supplied of fish has risen from 100 units to 130 units. What is the price elasticity of supply (PES) of fish?

Oct/Nov 2025