Ch 9

Front

PES is a measure of the responsiveness of _____ to a given change in _____.

Back

supply, price

Front

PES allows firms to determine how a change in price will affect production levels

Back

how a change in price will affect production levels

Front

PES coefficient can range from ​​ to ​ ​

Back

0, infinity

Front

Which is true when PES=1?

Back

It is unit price elastic.

Front

What does it mean for PES to be unit price elastic?

Back

A percentage increase (or decrease) in price leads to an equal percentage increase (or decrease) in quantity supplied

Front

What does it mean if PES = infinity?

Back

The supply is perfectly price elastic

Front

when PES=infinity

Back

any change in quantity supplied has no change in price

Front

A less steep (shallower) supply curve means the PES is _______, aka ______________

Back

higher, more elastic

Front

Formula to calculate PES=

Back

percent change in quantity supplied/ percentage change in price

Front

Why must PES always be a positive value?

Back

The law of supply