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Price Elasticity of Supply
A measure of the responsiveness of quantity supplied when there is a change in price.
Price elasticity of supply is defined as the percentage change in quantity supplied divided by the percentage change in price:
$$ \mathrm{PES} = \frac{\%\Delta Q_s}{\%\Delta P}$$
Where:
Therefore, using the above formulas, PES can be written as:
$$ \mathrm{PES} = \frac{\frac{Q_{new}-Q_{old}}{Q_{old}}\times 100}{\frac{P_{new}-P_{old}}{P_{old}}\times 100} = \frac{\frac{Q_{new}-Q_{old}}{Q_{old}}}{\frac{P_{new}-P_{old}}{P_{old}}}=\frac{\frac{\Delta Q}{Q_{old}}}{\frac{\Delta P}{P_{old}}} $$
The expanded format of writing PES is provided here as in exam papers, they might ask you to calculate the percentage change in quantity supplied and price to figure out the PES!
As observed above, it is almost identical to $PED$ but rather focuses on the quantity supplied.
If we know that:
Then we can calculate the $PES$ at $P=50$ by using the formula above.
Hence the price elasticity of supply would be:
$$ PES = \frac{\%\Delta Q_s}{\%\Delta P} = \frac{66.66..}{100} = \frac{2}{3}$$
For the example above, we would get a different $PES$ if we used $P_2,Q_2$ as our initial values and $P_1,Q_1$ as the new one (you can try this yourself)
Hence make sure to write "PES at P = initial price".
As we can see, the price elasticity of supply is positive.
PES values help classify supply into different categories.
Now think of seasonal fruits
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