# What is the price elasticity of supply?

Finds the price elasticity of supply by the midpoint method from two prices and the quantities supplied at each, and says whether supply is elastic, inelastic or unit elastic.

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- Version: 137a78b3bc7a

## Default answer

Example with the default inputs (Starting price $650.00, Quantity supplied at the starting price 10,000, New price $700.00, Quantity supplied at the new price 13,000): The price elasticity of supply is 3.52: supply is elastic.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| p1 | Starting price | The price before the change. |
| q1 | Quantity supplied at the starting price | How many units sellers offer at the starting price. |
| p2 | New price | The price after the change. |
| q2 | Quantity supplied at the new price | How many units sellers offer at the new price. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| elasticity | Price elasticity of supply | The size of % change in quantity supplied ÷ % change in price (midpoint method), without its sign. |
| kind | Supply is | Elastic above 1, unit elastic at exactly 1, inelastic below 1, perfectly inelastic at 0. |
| signed | Elasticity with its sign | % change in quantity supplied ÷ % change in price; negative when price and quantity move in opposite directions. |
| quantityChange | % change in quantity supplied | (Q₂ − Q₁) ÷ ((Q₁ + Q₂) ÷ 2) × 100. |
| priceChange | % change in price | (P₂ − P₁) ÷ ((P₁ + P₂) ÷ 2) × 100. |

## Method

Elasticity = (% change in quantity supplied) ÷ (% change in price), where each % change = (new − old) ÷ ((new + old) ÷ 2) × 100 (the midpoint method), shown without its sign.

## Assumptions

- The midpoint (arc) method, so going from A to B gives the same elasticity as going from B to A.
- Everything else that affects supply stays the same between the two points.
- Prices are at least $0.01; quantities are 0 or more, not both 0.

## Worked examples

1. p1 = $650.00, q1 = 10,000, p2 = $700.00, q2 = 13,000 gives elasticity = 3.52, kind = elastic, quantityChange = 26.09%, priceChange = 7.41%. Source: OpenStax, Principles of Economics 3e, section 5.1 Price Elasticity of Demand and Price Elasticity of Supply (midpoint method; from $650 and 10,000 units to $700 and 13,000 units: 26.1% ÷ 7.4% = 3.5, elastic; elastic above 1, unitary at 1, inelastic below 1), https://openstax.org/books/principles-economics-3e/pages/5-1-price-elasticity-of-demand-and-price-elasticity-of-supply (retrieved 2026-11-01) (26.1%, 7.4%, 3.5).
2. p1 = $10.00, q1 = 100, p2 = $12.00, q2 = 110 gives elasticity = 0.52, kind = inelastic. Source: OpenStax, Principles of Economics 3e, section 5.1 Price Elasticity of Demand and Price Elasticity of Supply (midpoint method; from $650 and 10,000 units to $700 and 13,000 units: 26.1% ÷ 7.4% = 3.5, elastic; elastic above 1, unitary at 1, inelastic below 1), https://openstax.org/books/principles-economics-3e/pages/5-1-price-elasticity-of-demand-and-price-elasticity-of-supply (retrieved 2026-11-01).
3. p1 = $8.00, q1 = 100, p2 = $10.00, q2 = 125 gives elasticity = 1, kind = unit elastic. Source: OpenStax, Principles of Economics 3e, section 5.1 Price Elasticity of Demand and Price Elasticity of Supply (midpoint method; from $650 and 10,000 units to $700 and 13,000 units: 26.1% ÷ 7.4% = 3.5, elastic; elastic above 1, unitary at 1, inelastic below 1), https://openstax.org/books/principles-economics-3e/pages/5-1-price-elasticity-of-demand-and-price-elasticity-of-supply (retrieved 2026-11-01).
4. p1 = $3.00, q1 = 500, p2 = $4.00, q2 = 500 gives elasticity = 0, kind = perfectly inelastic. Source: OpenStax, Principles of Economics 3e, section 5.1 Price Elasticity of Demand and Price Elasticity of Supply (midpoint method; from $650 and 10,000 units to $700 and 13,000 units: 26.1% ÷ 7.4% = 3.5, elastic; elastic above 1, unitary at 1, inelastic below 1), https://openstax.org/books/principles-economics-3e/pages/5-1-price-elasticity-of-demand-and-price-elasticity-of-supply (retrieved 2026-11-01).
5. p1 = $10.00, q1 = 100, p2 = $12.00, q2 = 90 gives elasticity = 0.58, signed = −0.5789, kind = inelastic. Source: OpenStax, Principles of Economics 3e, section 5.1 Price Elasticity of Demand and Price Elasticity of Supply (midpoint method; from $650 and 10,000 units to $700 and 13,000 units: 26.1% ÷ 7.4% = 3.5, elastic; elastic above 1, unitary at 1, inelastic below 1), https://openstax.org/books/principles-economics-3e/pages/5-1-price-elasticity-of-demand-and-price-elasticity-of-supply (retrieved 2026-11-01).

## FAQ

### What is the price elasticity of supply?

It measures how the quantity supplied responds to a change in price: the percent change in quantity supplied divided by the percent change in price.

### What is the price elasticity of supply formula?

Elasticity = % change in quantity supplied ÷ % change in price. By the midpoint method, each % change is (new − old) ÷ ((new + old) ÷ 2) × 100.

### Can you show a worked example?

OpenStax uses an apartment at $650 with 10,000 units supplied, and at $700 with 13,000 units. The % change in quantity is 3,000 ÷ 11,500 = 26.1%, the % change in price is 50 ÷ 675 = 7.4%, and the elasticity is 3.5, so supply is elastic over this range.

### What do elastic and inelastic supply mean?

Elastic supply (above 1) responds strongly: quantity changes by a larger percent than price. Inelastic supply (below 1) responds weakly. At exactly 1 it is unit elastic, and at 0 quantity does not change at all.

### Why does the answer have no minus sign?

OpenStax reads elasticity as an absolute value. The signed value is shown too, so you can see when quantity supplied moved against the price.

### What does a negative signed value mean?

Quantity supplied fell while the price rose, or rose while the price fell. Check your inputs, or look for something else that changed between the two points.

## Sources

- OpenStax, Principles of Economics 3e, section 5.1 Price Elasticity of Demand and Price Elasticity of Supply (the midpoint method; from $650 and 10,000 units to $700 and 13,000 units: 26.1% ÷ 7.4% = 3.5, elastic; elastic above 1, unitary at 1, inelastic below 1). Retrieved 2026-11-01. https://openstax.org/books/principles-economics-3e/pages/5-1-price-elasticity-of-demand-and-price-elasticity-of-supply