The price elasticity of supply for most goods and services is positive
This means that when there is an increase (outward shift) in demand for a product, we see an expansion along and up the supply curve for a producer. Higher demand provides an incentive to sell more and increase revenues and profits.
Supply will be elastic when PES > 1 i.e. a 15% increase in price brings about a 30% expansion of supply.
The diagram below shows two supply curves - one is price inelastic, the other is price elastic.
When supply cannot respond to a price/demand change, the supply curve is drawn as vertical and PES = 0
When supply can respond to any change in demand without a change in market price, the supply curve is drawn as horizontal and PES = infinity
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