Price elasticity of supply (PES) - tells us how much quantity supplied will change in response to a change in price. , Ped = 0 - There is no change in quantity as price changes. , Elastic supply - when the % change in quantity supplied is greater than the % change in price. , Consumer: If price and quantity move to the right - Products become more expensive but will start to fall once new competitors have been attracted. , Price elasticity of supply - The responsiveness of quantity supplied to change in the price of a product.  , PES - this is always a positive so does need a minus sign in front of it, Consumer: If price and quantity move to the left - Consumers can afford more but now have less choice. , PED = 1 - Change in quantity is equal to the change in price. , Producer: If price and quantity move to the right - producers initially increase but more competition will enter the market , Inelastic supply - When the % change in quantity supplied is less than the % change in price. , PED - between 0 and 1 - change in quantity is less than change in price , Producer: If price and quantity move to the left - Profits fall. Less efficient businesses close Output goes down. , PED = infinity  - An infinite amount can be supplied at the given price: no change in price, PED between 0 and infinity  - Change in quantity is more than the change in price. ,

3. Supply- PES OCR GCSE

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