If the value of x equals 1, PES is unit elastic.

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Multiple Choice

If the value of x equals 1, PES is unit elastic.

Explanation:
Price elasticity of supply (PES) measures how much quantity supplied responds to a change in price. It is the percentage change in quantity supplied divided by the percentage change in price. When that ratio equals 1, supply is unit elastic, meaning quantity supplied changes in direct proportion to price. For example, a 10% rise in price leading to a 10% rise in quantity supplied gives PES = 10%/10% = 1. If the ratio is less than 1, supply is inelastic; if greater than 1, supply is elastic; if the quantity supplied responds without limit to price changes, it is perfectly elastic. Therefore, x = 1 corresponds to unit elastic.

Price elasticity of supply (PES) measures how much quantity supplied responds to a change in price. It is the percentage change in quantity supplied divided by the percentage change in price. When that ratio equals 1, supply is unit elastic, meaning quantity supplied changes in direct proportion to price. For example, a 10% rise in price leading to a 10% rise in quantity supplied gives PES = 10%/10% = 1. If the ratio is less than 1, supply is inelastic; if greater than 1, supply is elastic; if the quantity supplied responds without limit to price changes, it is perfectly elastic. Therefore, x = 1 corresponds to unit elastic.

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