Write short note on Elasticity of supply. – InterviewSolution

1.	Write short note on Elasticity of supply.
Answer» Elasticity of SUPPLY measures the degree of responsiveness of quantity supplied to a change in own price of the commodity. It is also defined as the PERCENTAGE change in quantity supplied divided by percentage change in price. It can be calculated by using the following formula: ES = % change in quantity supplied/% change in price Symbolically, ES = ∆Q/Q ÷ ∆P/P = ∆Q/∆P × P/Q Examples of INELASTIC goods would be water, gasoline, HOUSING, and food. Elasticgoods are usually VIEWED as luxury items.

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