ELASTICITY OF
the method used SUPPLY
to measure the response to quantity supply of producers
whenever there is a change in price.
DEGREE OF SUPPLY
1. ELASTIC when ELASTICITY
the percentage change in quantity supplied is greater than the
SUPPLY -
percentage change in price.
% QS % P
2. INELASTIC when the percentage change in quantity supplied is less than the
SUPPLY -
percentage in price.
% QD % P
DEGREE OF SUPPLY
ELASTICITY
3. UNITARY SUPPLY when the percentage change in quantity supplied is equal to the
-
percentage change in price.
% QS % P
4. PERFECTLY ELASTIC when the quantity supplied increases or decreases even though
SUPPLY -
the price is constant.
% QD % P
DEGREE OF SUPPLY
ELASTICITY
5. PERFECTLY INELASTIC this means that the quantity supplied does not respond to
SUPPLY - any
change in price.
E O
FORMULA IN GETTING THE
ELASTICITY OF SUPPLY
% QS
Es % P Es = Elasticity of supply
= % QS = percentage change in quantity supply
% P = percentage change in price
Mang Nilo usually sells 30
% QS
Es = kilos of apples per day in the
% P market at 80 pesos per
kilo.But due to the
Qs Qs approaching holiday season
Qs1 = old supply
% QS = 2 1 X 100 the price of apples increase
Qs Qs Qs2 = new supply to 100 per kilos. And
1 2
2 because of this, Mang Nilo
decided to sell 60 kilos of
P2 P1 P1 = old price apples per day.
% P= X 100
Given:
P1 P2 P2 = new price
Qs1 30 P1 80
2
Qs2 60 P2 100
Given:
% QS 66.67
Es = Qs1 30 P1 80
% P Qs2 60 P2 100
Qs Qs 60 - 30
X 100
% QS = 2 1 X 100 30 + 60
Qs Qs 2
1 2
2 30
X 100
90
P2 P1 2
% P= X 100 30
P1 P2 X 100
45
2
% QS = 66.67
Given:
% QS 66.67
Es = 22.22
Qs1 30 P1 80
% P Qs2 60 P2 100
100 - 80
P2 P1 X 100
% P= X 100 80 + 100
P1 P2 2
2 20
X 100
180
2
20
X 100
90
% P = 22.22
% QS 66.67
Es = 22.22
% P
Es = 3
ELASTIC
% QS % P
66.67 22.22
QS1 = 100 P1 = 60
QS2 = 200 P2 = 80
P QS
MAG - COMPUTE
A 23 12
TAYO!!!
1. POINT B AND C
QS1 = 24 P1 = 26
B 26 24 QS2 = 44 P2 = 31
C 31 44 2. POINT A AND D
QS1 = 12 P1 = 23
D 34 56
QS2 = 56 P2 = 34
E 38 72
END OF
LESSON
Given:
Q1 25 P1 42
Q2 20 P2 53
-22.22
Ed Ed -0.96 Ed 0.96
23.16
= = =
Inelastic
% QD % P
23.18
22.22
Cedric usually play in the computer shop for 5 hours every
Saturday for 10 pesos per hour. But with the increase in electricity
bills, the computer shop fee has increased by 25 pesos per hour so
Cedric can only play for 2 hours this Saturday.
Given:
Old quantity Old price(P1)
demanded(Qd1)
New quantity New
demanded(Qd2) price(P2)
Given:
Old quantity Old price(P1) 1
5
0
demanded(Qd1)
New quantity 2 New 25
demanded(Qd2) price(P2)
Qd Qd
% QD = 2 1 X 100
Ed % P
Qd
1
Qd
2
2
= 2 5 -3 -3
= X 100 X 100 X 100
5 2 7 3.5
2 2 -85.71
Given:
Old quantity Old price(P1) 1
5 0
demanded(Qd1)
New quantity 2 New 25
demanded(Qd2) price(P2)
P 2 P1
% QD = X 100
Ed % P
P1 P2
2
= 25 10 15 15
= X 100 X 100 X 100
10 25 35 17.
2 2 5 85.71
% QD-85.71
Ed
% P 85.71
=
Ed = Ed = 1
-1
UNITARY
% DEMAND
QD % P
85.71 85.71
