Suppose that the price elasticity of supply is 0.60 and the price increases by 5%.We will predict a percent increase in the quantity supplied of
A) 3.
B) 6.
C) 8.33.
D) 12.

Question

Quizplus · Accepted Answer

The percent increase in the quantity supplied is calculated by multiplying the price elasticity of supply (0.60) by the percent increase in price (5%), which equals 3% (0.60 * 5 = 3).

Suppose That the Price Elasticity of Supply Is 0