price elasticity of supply (pes)

How to Calculate PES?

PES is calculated using the formula:
\[ \text{PES} = \frac{\text{Percentage Change in Quantity Supplied}}{\text{Percentage Change in Price}} \]
For example, if the price of a product increases by 10% and the quantity supplied increases by 15%, the PES would be:
\[ \text{PES} = \frac{15\%}{10\%} = 1.5 \]
A PES greater than 1 indicates elastic supply, while a PES less than 1 indicates inelastic supply.

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