Elasticity of Supply

In the case of linear expressions, a supply curve in its simplest form would be:

or

where P denotes the price, QS denotes the quantity, and c and d are positive constants. Continuing with the maple syrup example, if the price of maple syrup increases by $1 per litre (i.e., ΔP = 1), then the quantity supplied will increase by . Therefore, the ratio is equal to .

Now we can look more closely at the price elasticity of supply:

Notice: