This Economics video explains price elasticity of supply.
In economics, price elasticity of supply (PES) is a measure of the responsiveness or sensitivity of the quantity supplied of a good or service to a change in its price. It is calculated as the percentage change in the quantity supplied divided by the percentage change in price.
VIDEO CHAPTERS
00:00 Introduction
00:13 What is price elasticity of supply
00:53 Applications of price elasticity of supply
01:32 Numerical example
02:32 Factors affecting price elasticity of supply
03:53 Case studies
05:40 Elastic & inelastic supply curves
07:30 Worked example: supply of EV charging points
VIDEO SUMMARY
This video is about the elasticity of supply, a concept in economics that measures how responsive the supply of a good or service is to a change in its price.
The video explains the concept with a formula and breaks it down into two categories: elastic supply and inelastic supply. Elastic supply refers to situations where a small change in price leads to a large change in quantity supplied. Inelastic supply refers to situations where a small change in price leads to a a small change in quantity supplied.
The factors affecting the elasticity of supply are identified as spare capacity, stocks, ease of substitution of factors of production, and time period. The longer the time period producers have to adjust to production levels, the more elastic the supply will tend to be.
Examples are provided to illustrate the concepts. For instance, the elasticity of supply of charging points for electric vehicles is discussed. The video concludes by explaining how government subsidies and process innovation can increase the availability of charging points, thereby making the supply more elastic and bringing prices down.
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