Understanding Price Elasticity of Supply and Characteristics of Supply Curves

The video tutorial explains the concept of price elasticity of supply, which measures how supply responds to price changes. It distinguishes between elastic and inelastic supply, where elastic supply shows a more than proportionate change in quantity supplied with price changes, and inelastic supply shows less. The tutorial covers the possible values of price elasticity, including unit elasticity, and special cases like perfectly elastic and inelastic supply. It also discusses non-linear supply curves and how to determine elasticity at different points using tangents. The video concludes with a review of key concepts and encourages note-taking for better understanding.

What does it mean when the price elasticity of supply is equal to 1?

What is the significance of the tangent line in determining elasticity on a nonlinear supply curve?

How does spare capacity affect the price elasticity of supply?

How does the price elasticity of supply change as quantity supplied increases?