Ask Question
10 May, 21:06

If a 15% change in price results in a 20% change in quantity supplied, then the price elasticity of supply is about a. 0.75, and supply is elastic. b. 1.33, and supply is elastic. c. 1.33, and supply is inelastic. d. 0.75, and supply is inelastic.

+3
Answers (1)
  1. 10 May, 21:33
    0
    The correct answer is option b.

    Explanation:

    The price elasticity of supply shows the impact of change in price level on the quantity demanded of the good.

    It is calculated by the ratio of percentage change in quantity supplied to percentage change in price level.

    The percentage change in price level is = 15%

    The percentage change in quantity supplied is = 20%

    The price elasticity of supply will be

    =% change in quantity/% change in price

    =20%/15%

    =1.33

    Since, the elasticity is higher than 1 it means supply is elastic.

    So, option b is the correct answer here.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If a 15% change in price results in a 20% change in quantity supplied, then the price elasticity of supply is about a. 0.75, and supply is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers