When the increase in price for a new video game is 10%, the increase in quantity supplied of that new video game is 60%. What is the price elasticity of supply for that video game?

Price elasticity of supply is 6.

Explanation:

Price elasticity of supply measures the responsiveness of supply to the change in the price of the product. We can calculate the price elasticity by following formula:

Price elasticity to supply = % Change in supply / % change in price

Price elasticity to supply = 60% / 10%

Price elasticity to supply = 6

The price elasticity of supply of the video game is + 6

Explanation:

Price elasticity of supply is used to show the responsiveness of the quantity of goods supplied by a producer to the changes in price. It essentially tells the ratio of the change in quantity supplied to the change in price. In reality, the Price elasticity of supply (PES) is never negative, but can be zero; perfectly inelastic to an infinity value; perfectly elastic.

mathematically, it is represented as;

PES = (% change in supply) : (% change in price)

∴ PES = 60 : 10 = 6 or + 6