With reference to the extract, how price elastic would supply of nuclear energy be?
The Price Elasticity of Supply for energy generated from nuclear power plants is likely to be quite low, likely below 1 – PES is calculated by %change in quantity supplied / %change in price, indicating that a %increase in price would result in a less than proportional increase in quantity supplied. One of the factors influencing PES is time taken to fill demand – according to the extract, building a new power plant at Hinkley Point has taken 10 years, suggesting that an increase in price cannot necessarily be met by a quick increase in quantity supplied.
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