class 12 microeconomics elasticity of supply very important notes

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Elasticity of supply....... short and easy notes for board exam.

1. What do you mean by elasticity of demand?
> Elasticity of demand is the measurement of quantitative changes in supply due to change in price. It is the proportionate change in supply due to proportionate change in price.


The elasticity of supply is positive because of the direct relationship between price and quantity supplied

2. What are the kinds or degree of elasticity of supply?
> There are five kinds of elasticity of supply;
  • Perfectly elastic supply - without change in price, supply become infinite. It is the situation of perfectly elastic supply.




  • Greater than unitary elastic supply - when proportionate change in quantity supplied, is more than proportionate change in price. Elasticity of demand becomes greater than unit.


  • Unitary elastic supply - proportionate change in quantity supply become equal to change in price.



  • Inelastic supply - proportionate change in quantity supply is less than proportionate change in price.



  • Perfectly elastic supply - when there is no change in supply as a result of price change.



3. Write the method or measuring elasticity of supply.
> There are two method of measuring elasticity of supply;
  • Percentage method - percentage change in quantity supply and percentage change in price of commodity is called percentage method.


  • Geometric method or point method - under this method, every supply lines has been extended up to the point B. A perpendicular P has been drawn from the point B to X-axis. Supply elasticity on the supply line can be measured.







POINTS;
  • When supply increases more with a result of small increase in price, the nature of supply will be elastic.
  • When the proportionate change in supply is more than the proportionate change in price, the elasticity of supply will be greater than 1.
  • Perfectly inelastic supply curve age parallel to Y-axis.
  • Unit elastic supply curve Rises from origin.
  • In very short period supply curve is perfectly inelastic.
  • When elasticity of supply will infinite, supply curve is parallel to X-axis.
  • For good like perishable goods and milk, elasticity is zero.

BONUS POINT;

















THE END

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