Price elasticity of supply is a ratio of the change in

Price elasticity of supply is a ratio of the change in quantity supplied to the change in price. Price elasticity of supply (PES) measures the responsiveness of the quantity supplied of a good or service to a change in its price. In other words, it measures how much the quantity supplied changes when the price changes. The formula for PES is: PES = Percentage change in quantity supplied / Percentage change in price PES is a positive value, and its magnitude indicates how responsive the quantity supplied is to changes in price. If PES is greater than 1, the quantity supplied is elastic, meaning that it is highly responsive to changes in price. If PES is less than 1, the quantity supplied is inelastic, meaning that it is not very responsive to changes in price. Overall, PES is an important concept in economics, as it helps us to understand how suppliers will react to changes in price, and how this will affect the market equilibrium.