The formula to calculate the Price Elasticity of Supply (PES) is:
\[ \text{PES} = \frac{S}{P} \]
Where:
Price Elasticity of Supply (PES) is a measure of how much the quantity supplied of a good changes in response to a change in its price. It is calculated as the ratio of the percentage change in supply to the percentage change in price. A higher PES value indicates that supply is more responsive to price changes, while a lower PES value indicates that supply is less responsive.
Let's assume the following values:
Using the formula to calculate the Price Elasticity of Supply:
\[ \text{PES} = \frac{20}{10} = 2 \]
The Price Elasticity of Supply is 2.