High School

Which of the following formulas is a correct expression of the price elasticity of supply? e,=QΔQ1+ΔPP e3=ΔPΔQ1+QP e1=PΔP+QΔQ3 e1=ΔQdΔP+QP 0,=ΔQdQ+ΔPP

Answer :

The correct expression of the price elasticity of supply is

e1 = ΔQs / ΔP * (P / Qs), where:

- e1 represents the price elasticity of supply

- ΔQs represents the change in quantity supplied

- ΔP represents the change in price

- P represents the initial price

- Qs represents the initial quantity supplied

This formula measures the responsiveness of the quantity supplied to a change in price. A value of e1 greater than 1 indicates elastic supply, meaning that a change in price leads to a relatively larger change in quantity supplied.

Conversely, a value of e1 less than 1 indicates inelastic supply, where a change in price results in a relatively smaller change in quantity supplied.

A value of e1 equal to 1 represents unitary elasticity, where the percentage change in quantity supplied is the same as the percentage change in price.

To learn more about elastic supply

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