PES Formula and Calculation
Elasticity of Supply
AO4
Syllabus requirement
PES = percentage change in quantity supplied / percentage change in price; used to calculate PES values using data.
Assessment objectives
AO4 Use of Appropriate Skills
Summary
Price elasticity of supply (PES) measures how much the quantity supplied of a good responds to a change in its price, assuming movement along a given supply curve. It is calculated as the percentage change in quantity supplied divided by the percentage change in price, and its numeric value indicates whether supply is relatively elastic (>1) or inelastic (0–1). Understanding PES helps explain how easily producers can adjust output when market prices change and which goods face constraints on supply response.
