The price elasticity of supply is ? |
dependent on units independent of units sometimes independent sometimes dependent |
independent of units |
The correct answer is option 2: independent of units Elasticity measures percentage changes: Price elasticity of supply is calculated using percentage changes in quantity supplied and percentage changes in price. Percentage changes are unitless, meaning they don't depend on the units used to measure price or quantity. Whether we measure quantity in kg, liters, or units, and price in rupees or dollars, the elasticity remains the same. Ratio of percentages: The elasticity is a ratio of two percentages, further removing any dependence on the specific units of measurement. |