Price Elasticity of Supply Quiz (5 Questions)

1 / 5

Which formula represents the calculation of PES using the percentage method?

PES = (Q2 - Q1) / (P2 + P1)

PES = % change in quantity demanded / % change in price

PES = (P2 - P1) / (Q2 + Q1)

PES = % change in quantity supplied / % change in price

2 / 5

In the context of a linear supply curve, what information is needed to calculate PES?

The total change in quantity supplied over the period

The slope of the supply curve and the specific point at which to calculate elasticity

The percentage change in price over the period

The average price and quantity over the period of interest

3 / 5

How does the Midpoint Method calculate PES?

By calculating the percentage change in quantity supplied due to a one-unit change in price

By applying logarithmic regression to estimate the elasticity

By using the average of the initial and final prices and quantities as the base for percentage changes

By using the slope of the supply curve at a single point

4 / 5

What does Price Elasticity of Supply (PES) measure?

The responsiveness of quantity supplied to a change in price

The responsiveness of quantity demanded to a change in income

The change in price following a change in market demand

The time it takes for supply to adjust to a new equilibrium

5 / 5

Which method is used to calculate elasticity over a range of the supply curve?

Midpoint Method

Arc Elasticity Method

Point Elasticity Method

Linear Supply Curve Method

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