YED

Positive YED normal good

Negative YED Inferior good

YED = %change in qd / %change in income

YED < 1 income inelastic

YED = 0 income

PES = percentage change in quantity supplied / Percentage change in price

PES measures the degree of responsiveness of quantity supplied it measures how much producers will change their supply as price goes up.

PES > 1 supply is price elastic

PES < 1 supply is inelastic

PES = 1 then the price went up by 10%

PES = 0 price is perfectly inelastic

PES = infinity supply can change without any change in price.

If its easy to substitute a good then PES > 1

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