﻿ Price elasticity of supply - questions | Economics Online

# Questions on price elasticity of supply

#### News

##### Gender pay gap

80% of UK companies and public sectors organisations pay women less than men.

## PES

### Question 1

Contrast the price elasticity of supply for:

1. A computer software producer

2. A potato farmer

3. A firm of solicitors

PES shows quickly a firm can respond to a change in market conditions. More specifically it shows how quickly firms respond to a change in price.

### Question 2

The following shows 3 different car producer’s supply schedules (millions of cars):

 Price £000 Firm X Firm Y Firm Z 10 5 15 20 12 7 16 20 14 9 17 20 16 11 18 20 18 13 19 20 20 15 20 20 22 17 21 20 24 19 22 20 26 21 23 20 28 23 24 20

1.    Using the correct equation, work out the PES value for all three firms for the price range £24,000 to £26,000.

2.    Draw all three supply curves, labelling them correctly.

3.    Which firm is the most competitive, and why?

4.    What could the ‘least competitive’ firm do to improve its competitiveness?

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