elasticity of supply

• Elasticity Of Supply

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Oil prices - CFTC investigation

1 The report stated that as a result of the imbalance and low price

elasticity, very large price increases occurred as the market attempted to

balance scarce price elasticity of supply|supply against growing price

elasticity of demand|demand, particularly in the last three years


Energy economics

1 * Elasticity (economics)|Elasticity of supply and

demand in energy market


Taxation - Tax incidence

1 If the elasticity of supply is low, more of the tax will be paid by the supplier


Taxation - Deadweight costs of taxation

1 The tax burden and the amount of deadweight cost is dependent on the

elasticity (economics)|elasticity of supply and demand for the good

taxed.


Taxation - Optimal tax

1 Because deadweight costs are related to the elasticity (economics)|elasticity of supply and demand for a

good, it follows that putting the highest tax rates on the goods for

which there is most inelastic supply and demand will result in the least

overall deadweight costs


Demand - Is the demand curve for PC firm really flat?

1 where PEDm is the market elasticity of demand, PES is the elasticity of supply of each of the other firms, and (n -1) is the

number of other firms.Perloff (2008) p. 245–246 This formula suggests two things. The demand curve is not perfectly elastic and if

there are a large number of firms in the industry the elasticity of demand for any

individual firm will be extremely high and the demand curve facing the firm will be nearly

flat.Perloff (2008) p. 244.


Demand - Is the demand curve for PC firm really flat?

1 For example assume that there are 80 firms in the industry and that the demand elasticity for industry is -1.0 and the price elasticity of supply is 3.

Then


Tax - Deadweight costs of taxation

1 The tax burden and the amount of deadweight cost is dependent on the

elasticity (economics)|elasticity of supply and demand for the good

taxed.


Microeconomic theory - Measurement of elasticities

1 Frequently used elasticities include price elasticity of demand, price

elasticity of supply, income elasticity of demand, elasticity of substitution between factors of production and

elasticity of intertemporal substitution.


Monopsony - Wage discrimination

1 Just like a monopolist, a monopsonistic employer may find that its profits are maximized if it

discriminates prices. In this case this means paying different wages to

different groups of workers even if their MRP is the same, with lower

wages paid to the workers who have a lower elasticity of supply of their

labor to the firm.https://store.theartofservice.com/the-elasticity-of-supply-toolkit.html

Elasticity (economics)

1 A major study of the price elasticity of supply and the price elasticity of

demand for US products was undertaken by Hendrik S. Houthakker

and Lester D. Taylor.Hendrik S. Houthakker, Lester D. Taylor (1970).


Elasticity (economics) - Elasticities of supply

1 ; Price elasticity of supply


Elasticity (economics) - Elasticities of supply

1 : The price elasticity of supply measures how the amount of a good that a supplier wishes to supply changes in response to a change in price.Perloff, J. (2008). p.36. In

a manner analogous to the price elasticity of demand, it captures the extent of

movement along the supply curve. If the price elasticity of supply is zero the

supply of a good supplied is inelastic and the quantity supplied is fixed.


Real estate economics - Supply of housing

1 The long-run price elasticity of supply

is quite high


Economic theory - Supply and demand

1 These distinctions translate to differences in the Price elasticity of supply|elasticity (responsiveness) of

the supply curve in the short and long runs and corresponding

differences in the price-quantity change from a shift on the supply or

demand side of the market.


Oil price increases since 2003 - Possible mitigations

1 A higher price should Price elasticity of supply|stimulate producers to

produce more, and Price elasticity of demand|consumers to consume less, while possibly shifting to substitute

good|substitutes


Tax burden

1 The key concept is that the tax incidence or tax burden does not depend on where the revenue is

collected, but on the price elasticity of demand and price elasticity of

supply


Tax burden - Example of tax incidence

1 Where the tax incidence falls depends (in the short run) on the

price elasticity of demand and price elasticity of supply


Tax burden - Other practical results

1 * If consumers drive the same number of miles regardless of gas prices, then a tax on gasoline will be paid for by consumers and not oil companies (this is assuming that the price elasticity of supply of oil is high, which

is incorrect. In this case both the price elasticity of demand and supply are very low). Who actually bears the economic

burden of the tax is not affected by whether government collects the tax at the pump or

directly from oil companies.


Price elasticity - Effect on tax incidence

1 PEDs, in combination with price elasticity of supply (PES), can be

used to assess where the incidence (or burden) of a per-unit tax is falling or to predict where it will fall if the

tax is imposed


Price elasticity of supply

1 'Price elasticity of supply' ('PES' or 'Es') is a measure used in economics

to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its

price.


Laffer curve - Justifications

1 The relationship between tax rate and tax revenue is likely to vary from

one economy to another and depends on the elasticity of supply for labor and various other factors


Income elasticity of demand

1 In economics, 'income Elasticity (economics)|elasticity of Supply and demand|demand' measures the responsiveness of the

demand for a good to a change in the income of the people demanding the good, ceteris

paribus. It is calculated as the ratio of the percentage change in demand to the

percentage change in income. For example, if, in response to a 10% increase in income, the

demand for a good increased by 20%, the income elasticity of demand would be 20%/10%

= 2.https://store.theartofservice.com/the-elasticity-of-supply-toolkit.html

Price of petroleum - CFTC investigation

1 The report stated that as a result of the imbalance and low price

elasticity, very large price increases occurred as the Market (economics)|market attempted to balance scarce

price elasticity of supply|supply against growing price elasticity of

demand|demand, particularly in the last three years


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