Price Elasticity of Supply Definition

Steps:

• Recall that price elasticity of supply measures responsiveness in quantity supplied to price changes.
• Examine choice A: It matches the standard definition of how quantity supplied reacts to price.
• Check other choices: B involves price response to costs (not elasticity of supply); C links supply to production costs (that's cost elasticity); D describes cross-price effects (not own-price elasticity).
• Confirm via formula: PES = (%ΔQS / %ΔP), aligning only with A.

Why A is correct:

• It directly matches the economic definition: PES quantifies the percentage change in quantity supplied divided by the percentage change in price.

Why the others are wrong:

• B: Measures price response to costs, which is not supply elasticity.
• C: Describes responsiveness to production costs, akin to cost elasticity of supply.
• D: Refers to cross-price elasticity between related goods, not own-price supply elasticity.

Final answer: A