Understanding Price Elasticity of Supply

The video tutorial explains the concept of price elasticity of supply (PES), which measures how the quantity supplied of a good responds to a change in its price. It covers the formula for calculating PES, distinguishing between elastic and inelastic supply, and special cases like perfect and unit elasticity. The tutorial also discusses factors affecting PES, such as spare capacity and time frame, highlighting how these factors influence a firm's ability to adjust supply in response to price changes.

How does the level of spare capacity affect the Price Elasticity of Supply?

Discuss how the time frame influences the elasticity of supply.