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Economics-A-level-Aqa

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  1. 1-economic-methodology-and-the-economic-problem
    4 主题
  2. 2-individual-economic-decision-making
    4 主题
  3. 3-price-determination-in-competitive-markets
    10 主题
  4. 4-production-costs-and-revenue
    11 主题
  5. 5-perfect-and-imperfectly-competitive-markets-and-monopolies
    12 主题
  6. 6-the-labour-market
    7 主题
  7. 7-income-and-wealth-distribution
    4 主题
  8. 8-the-market-mechanism-market-failure-and-government-intervention
    16 主题
  9. 9-measuring-macroeconomic-performance
    5 主题
  10. 10-how-the-macroeconomy-works
    6 主题
  11. 11-economic-performance
    8 主题
  12. 12-financial-markets-and-monetary-policy
    6 主题
  13. 13-fiscal-and-supply-side-policies
    5 主题
  14. 14-the-international-economy
    16 主题
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The Definition & Calculation of PES

  • The law of supply states that when there is an increase in price (ceteris paribus), producers will increase the quantity supplied and vice versa

    • Economists are interested by how much the quantity supplied will increase

  • Price elasticity of supply (PES) reveals how responsive the change in quantity supplied is to a change in price

    • The responsiveness is different for different types of products

  • PES can be calculated using the following formula”

begin mathsize 16px style text PES = end text fraction numerator percent sign space change space in space quantity space supplied over denominator percent sign space change space in space price end fraction space equals space fraction numerator percent sign triangle space in thin space QS over denominator percent sign triangle in space straight P end fraction end style 

  • To calculate a % change, use the following formula:

percent sign space Change space equals space fraction numerator new space value space minus space old space value over denominator old space value end fraction space cross times space 100 

Worked Example

In recent months, the price of avocados has increased from AU$ 0.90 to AU$ 1.45. Bewdley Farm Shop in Margaret River has sought to maximise their profits by increasing the quantity supplied to the market. They have been able to increase sales from 110 units a week to 120 units a week.

Calculate the PES of avocados and explain one reason for the value 

Step 1: Calculate the % change in QS

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