Please refer to Economics Price Elasticity of Supply Class 12 Economics Notes and important questions below. The Class 12 Economics Chapter wise notes have been prepared based on the latest syllabus issued for the current academic year by CBSE. Students should revise these notes and go through important Class 12 Economics examination questions given below to obtain better marks in exams
Price Elasticity of Supply Class 12 Economics Notes and Questions
The below Class 12 Price Elasticity of Supply notes have been designed by expert Economics teachers. These will help you a lot to understand all important topics given in your NCERT Class 12 Economics textbook.
It is the degree of responsiveness in the quantity supplied due to change in the price of product.
Thus, it is the proportionate change in price of the product.
Types of Price Elasticity of Supply
1. Perfectly Inelastic Supply (ES=0)
When quantity supplied of a product does not change as a result of change in the price of the product, it is called Perfectly Inelastic supply. It is also called Zero Elastic Supply.
2. Relatively Inelastic Supply (ES<1)
When proportionate change in quantity supplied is less than the proportionate change in price of product, it is called Relatively Inelastic Supply. It is also called Less than Unit Elastic Supply.
3. Unit Elastic Supply (ES=1)
When proportionate change in quantity supplied is equal to the proportionate change in price of product, it is called Unit Elastic Supply.
4. Relatively Elastic Supply (ES>1)
When proportionate change in quantity supplied is more than proportionate change in price, it is called Relatively Elastic Supply. It is also called More Than Unit Elastic Supply.
5. Perfectly Elastic Supply (ES=∞)
When supply of a product either increases or decreases upto any extent without any change in the price of product, it is called Perfectly Elastic Supply.
Geometric Method/ Point Method
It is used to calculate elasticity of supply at a particular point on straight line upward sleeping curve.
To Calculate elasticity of supply at point R in the following diagram, supply curve is further extended till it meets x-axis at point T. Then elasticity of supply is calculated by dividing horizontal distance(TQ) by original quantity (OQ).
Es= 𝑯𝒐𝒓𝒊𝒛𝒐𝒏𝒕𝒂𝒍 𝑫𝒊𝒔𝒕𝒂𝒏𝒄𝒆 / 𝑶𝒓𝒊𝒈𝒊𝒏𝒂𝒍 𝑸𝒖𝒂𝒏𝒕𝒊𝒕𝒚
Factors affecting Elasticity of Supply
Question. Explain the factors of elasticity of supply/ determinants of supply?
Ans. 1. Time Period
Degree of price elasticity of supply is directly related to time period available for production. So, supply will be inelastic in short run but highly elastic in long run.
2. Availability of Resources
If there is scarcity of resources regd. for production, then supply will be inelastic whereas highly elastic supply in case of plenty resources availability of production.
3. Nature of Product
Perishable goods like fruits, milk, vegetables have inelastic supply because such products are offered for sale once they are produced even price decreases or increases. But, durable goods have highly elastic supply.
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