i. Meaning of Elasticity of supply.
ii. Formula for calculating Elasticity of supply.
iii. Graphical illustration of Elasticity of supply.
DEFINITION – Elasticity of supply can be defined as the degree of responsiveness change in quantity supplied as a result of change in price. Elasticity of supply measures the extent to which the quantity of a commodity supplied by a producer changes as a result of a little change in the price of the commodity
1. List two factors that can account for a regressive supply curve.
2. With the aid of a diagram, explain what is meant by exceptional supply curve.
3. Explain the following types of supply (a) Joint supply (b) Competitive supply
1. Fundamentals of Economics by Anyawuocha page 222 – 226
2. Comprehensive Economics by J.U. Anyaele page 130-134
1. The willingness of an individual to buy a commodity backed up with price at a give time is known as _______ demand.
(a) Joint (b) Derived (c) Effective (d) Composite
2. Given that D & i/p when P N2; D = 5000 units.
Calculate the quantity demanded when price increases to N4.
(a) 2500 units (b) 3500 units (c) 5000 units (d) 6000 units
3. What is the price when D = 3000 units
N1.3 (b) N3.33 (c) N13.3 (d) N33.33
4. Beef and hides could be said to exhibit ______ supply
(a) Derived (b) Joint (c) Composite (d) Competitive
5. Price and Quantity supply normally shows _____ relationship.
(a) Direct (b) Inverse (c) Unrelated (d) probability
1. State the law of supply.
2. State two circumstances that can lead to existence of abnormal supply curve.
1. Given the figures below:
Price of commodity x in 2004 = N10
Price of commodity x 2005 = N14
Quantity of x Supplied in 2004 = 20kg
Quantity of x Supplied in 2005 = 24kg
(a) Calculate (i) percentage change in quantity supplied (%). (ii) percentage change in price (%)
(iii) Co-efficient of price elasticity of supply (ES)
(b) From your answer in (i) is the supply elastic or inelastic (ii) How do you know this:
1. Essential Economics C. E. Ande page 196-198.