Question

The measurement of the elasticity of supply is made known as

• A. \( \frac{\Delta Q_s}{\Delta P} \times \frac{P}{Q_s} \)
• B. \( \frac{Q_s}{\Delta P} \times \frac{1}{P} \)
• C. \( \frac{Q_s}{\Delta Q_s} \times \Delta P \)
• D. \( \frac{\Delta P}{Q_s} \times \frac{P}{\Delta Q_s} \)

Hint:

The formula for elasticity (both supply and demand) is: (Change in Quantity / Change in Price) × (Original Price / Original Quantity).

Answer 1

The Correct Option is A

The formula for the price elasticity of supply (PES) measures the responsiveness of the quantity supplied to a change in price. It is defined as: \[ PES = \frac{\text{Percentage Change in Quantity Supplied}}{\text{Percentage Change in Price}} = \frac{(\Delta Q_s / Q_s)}{(\Delta P / P)} \] By rearranging the terms, we get the point elasticity formula: \[ PES = \frac{\Delta Q_s}{\Delta P} \times \frac{P}{Q_s} \] Among the given choices, none are perfectly written. Option (A) is the standard formula, though the image might be slightly distorted. It represents the change in quantity over the change in price, multiplied by the original price over the original quantity.