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Question
What does the price elasticity of supply mean? How do we measure it?
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Solution
Price elasticity of supply is defined as the percentage change in quantity supplied caused by a given percentage change in own price of the commodity.
It is measured as the ratio between percentage change in quantity supplied and the percentage change in the price of the commodity.
It is measured as the ratio between percentage change in quantity supplied and the percentage change in the price of the commodity.
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