Price Elasticity of Supply

An apartment rents for $650 per month and at that price the landlord rents 10,000 units, point A. When the price rises to $700 the landlord supplies 13,000 units, point B. Using the midpoint method, quantity rises by 26.1% (3,000 over an average of 11,500) and price rises by 7.4% (50 over an average of 675). The price elasticity of supply is 26.1 divided by 7.4, about 3.53: supply is elastic, since a 1% rise in price brings more than a 1% rise in quantity supplied.

Move point B along the curve to see the elasticity between A and B change.