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Slide 2 AS/Year 1 Microeconomics tutorial OCR A Level Economics Hodder & Stoughton Limited 2015 Price elasticity of supply Slide 3 OCR A Level Economics Price elasticity of supply(PES) PES measures the responsiveness of quantity supplied to a change in price Formula: percentage change in quantity supplied percentage change in price AS/Year 1 Microeconomics Hodder & Stoughton Limited 2015 2 Slide 4 OCR A Level Economics Elastic or inelastic? Elastic supply If the firm is able to increase supply quickly in response to a change in price, then supply is said to be price elastic in supply Inelastic supply If the firm is unable to increase supply quickly in response to a change in price, then supply is said to be price inelastic in supply AS/Year 1 Microeconomics Hodder & Stoughton Limited 2015 3 Slide 5 OCR A Level Economics Factors determining PES Time Weather conditions Ease of access to specialist equipment Planning permission and other government restrictions Stocks Spare capacity AS/Year 1 Microeconomics Hodder & Stoughton Limited 2015 4 Slide 6 OCR A Level Economics Short and long-run supply AS/Year 1 Microeconomics Hodder & Stoughton Limited 2015 5