Less than Unit Elastic Supply: When the change in the supply of a commodity is lesser as compared to the change in its price, we can say that it has a relatively less elastic supply.
The elasticity of supply, in this case, is equal to 1. Unit Elastic Supply: A product is said to have a unit elastic supply when the change in its quantity supplied is proportionate or equal to the change in its price. More than Unit Elastic Supply: When the percentage change in the supply is greater than the percentage change in price, then the commodity has the price elasticity of supply greater than 1. For a perfectly elastic supply, the percentage change in the price is zero for any change in the quantity supplied. This means that even for a slight increase in price, the supply becomes infinite. Perfectly Elastic Supply: A commodity becomes perfectly elastic when its elasticity of supply is infinite. Here, E S denotes the elasticity of supply which is equal to the percentage change in quantity supplied divided by the percentage change in the price of the commodity.īased on the above price elasticity of supply formula, there are 5 types of elasticity of supply: In this article, we will discuss the elasticity of supply formula, different types of elasticity of supply, the supply curve characteristics and many more.Īfter having understood the elasticity of supply definition in economics, we now move to the elasticity of supply formula which is based on its definition. It also gives an idea about the profit that could be made by selling that product at its price difference. It is an important parameter in determining how the supply of a particular product is affected by fluctuations in its market price. The price elasticity of supply is a measure of the degree of responsiveness of the quantity supplied to the change in the price of a given commodity.