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5 December, 18:41

The price elasticity of supply for umbrellas is 2. Suppose you're told that following a price increase, quantity supplied increased by 30 percent. What was the percentage change in price that brought this about

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  1. 5 December, 18:44
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    15%

    Explanation:

    The formula and the calculation of the price elasticity of supply are presented below:

    Price elasticity of supply = (Percentage change in quantity supplied : percentage change in price)

    where,

    Price elasticity of supply = 2

    And, the percentage change in quantity supplied is 30%

    So, the percentage change in price is

    = 30% : 2

    = 15%
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